DA Energy and Electricity Policy will end loadshedding, provide cheap and reliable electricity and fuel

2 August 2022

Click here to download a soundbite by Kevin Mileham MP and here for a soundbite by Ghaleb Cachalia MP.

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After years of energy paralysis and uncertainty by a failing ANC government, the DA has today released its Energy and Electricity Policy to fill this policy gap.

Presented today at the DA’s Federal Head Office, the goal of the DA’s Energy and Electricity policy is to ensure access to cheap electricity and fuel, end loadshedding and secure the environment for future generations. These are the building blocks that South Africa needs to build an energy secure economy that will stimulate investment and support job creation.

In the short term, South Africa needs to secure the amount of power made available by Eskom’s fleet of power plants to meet the minimum demands by consumers in addition to opening up – with speed – alternative sources of supply to meet the nation’s requirements.

The following key features distinguish the DA’s policy approach from the ANC’s approach to the energy and electricity crisis:

Consumer centric electricity model

The DA’s electricity policy is built on putting the consumer first. In contrast to the ANC’s current policy of a state driven electricity model, the DA approach actively facilitates the emergence of “prosumers”, where customers of electricity may also generate energy into the grid when they have surplus energy through:

Solar installation incentives - incentivize the uptake of rooftop solar for residential purposes by granting a once-off tax rebate.

Tackling the electricity grey market – eliminate illegal connections and provide an amnesty for all households with illegal connections.

Eliminating loadshedding

Eskom, as the primary generator of electricity is beset by an apparent inability to fix it’s fleet and plug the short-term needs while longer term solutions are put in place. The immediate and short-term electricity needs must however be addressed by a plan that addresses the reliability of supply within existing parameters in the most cost effective and source agnostic manner:

Unbundling Eskom - There should be a complete unbundling of Eskom. This means entirely separate enterprises which do not fall under the same holding company.

Competitive generation sector - Commercially viable power stations should be sold to private owners and operated until the end of the remaining life of the station. The envisioned end state for generation is of a diversified and competitive generation sector.

Independent electricity transmission operator - With generation and distribution privatized, the remaining transmission entity of Eskom, free from conflicts of interest, should become a national, state-owned, ITSMO, with power planning, procurement, contracting, grid system and electricity market operation functions.

Prioritizing new generation and storage capacity

The underlying premise of the DA’s policy is that, in view of the dire state of the country’s electricity generation capacity, South Africa should be making it easy, not difficult, for IPPs to bring new power at scale and in the shortest possible time:

Bring new electricity generation and storage capacity online as quickly as possible.

Attract and incentivize investment in embedded generation and IPPs. Ease the onerous regulatory burden that inhibits a speedier rollout of these technologies.

Just energy transition – no one left behind

A 'just transition' towards lower-carbon technologies requires reducing the risks faced by people who might be most adversely affected. It includes workers, poor communities, and small businesses. There needs to be a clear transition plan that will upskill and reskill former coal sector workers as well as reducing barriers for community owned projects to compete.

Competitive fuel industry

In order to promote a competitive fuel industry with low retail prices for consumers, there is an urgent need to remove government taxes, levies and price controls on liquid fuels to promote competition and ease the cost of living for all South Africans.

South Africa needs a competitive energy market where the state does not have a monopoly on energy generation, supply, and distribution. There should be a multiplicity of private suppliers, competing with one another to provide the best service and lowest price. This requires making it easier for energy suppliers to enter and participate in energy markets.

Issued by Kevin Mileham and Ghaleb Cachalia, 2 August 2022