Energy concerned on electrification drive underspending

Tuesday, October 9, 2018

The Department of Energy has expressed concern on underspending by municipalities on its electrification programme.

Addressing the 26th Technical Convention of the Association of Municipal Electricity Utilities (AMEU) on behalf of Minister Jeff Radebe, the department’s Deputy Director General, Jacob Mbele, said over R5 billion is spent on the Integrated National Electrification Programme (INEP) annually.

“[This] is around 85% of the Department of Energy’s annual budget allocation. While the progress is commendable, increasing under-expenditure by municipalities under the current fiscal constraint environment is a concern.

“The programme has over the last financial years seen budget reductions, which are likely to continue if municipalities do not execute projects and spend their electrification budgets as planned,” said Mbele on Tuesday.

There has been progress in delivering electricity to households, with over 87% of households now having access to electricity compared to just 36% in 1994.

The department said energy infrastructure is a critical component that underpins economic activity and growth across the country. It said infrastructure needs to be robust and extensive enough to meet industrial, commercial and household needs.

Speaking to those attending the convention, which got underway on Sunday, Mbele said the department is rolling out non-grid electrification solutions through solar home systems.

Electricity generation

Turning his attention to electricity generation, Mbele said while the sector is evolving due to innovation and technological advancements, increasing electricity prices are compounding the energy industry evolution.

“The electricity distribution in South Africa is facing many challenges that require our focus and collaboration. While load shedding has ceased, many electricity consumers and businesses continue to experience unplanned electricity outages.”

Urgent attention is required to resolve this, if South Africa is to embrace the energy revolution needed to grow the economy.

“For the distribution sector to embrace the energy revolution and transform the business models, the sector will first have to go back to basics. Unreliable networks due to insufficient investment in maintenance and refurbishment are a big area of concern for us, as it affects security of supply and therefore the economy.”

Electricity infrastructure 

Mbele said the department is working with the Development Bank of Southern Africa (DBSA) to look at options available to fund the maintenance and refurbishment backlog in municipal electricity infrastructure.

The department spoke out against electricity infrastructure vandalism, saying this is on the increase.

“[It] is costly for both utilities and consumers. Vandalism of infrastructure affects business and, therefore, the economy, which is equivalent to economic sabotage.”

He also spoke of the increasing number of court cases involving businesses interdicting Eskom from cutting supply to defaulting municipalities.

This, he said, is of concern to government as a whole.

“Increasing default by consumers to municipalities and Eskom, as well as increasing default or debt by municipalities to Eskom is a concern, as it threatens the sustainability of the entire electricity industry,” said Mbele.

Held at the CSIR Convention Centre in Tshwane, the convention will conclude on Wednesday. -