NERSA hearings have been “bitterly disappointing” and “have not worked” – energy expert

NERSA hearings have been “bitterly disappointing” and “have not worked” – energy expert

“Eskom should ask itself is whether their business model is sustainable”

“I have reviewed the outcomes of the NERSA hearings that I have testified at since 2009, and if we are going to be honest, the results have been bitterly disappointing as will be gauged when one examines the records of decision that have blessed Eskom with over 700% price increases since 2007.” This is according to Ted Blom, energy analyst and advisor to the energy and mining industries and spokesperson for the new OUTA (Organisation Undoing Tax Abuse).

He adds: “against that backdrop, it is clear that the NERSA hearings have not worked and that people have not been heard.“ Ted Blom will testify again at the NERSA (National Energy Regulator of South Africa) hearing next week in Johannesburg as part of the regulator’s current series of public hearings into Eskom’s application for electricity tariff hikes.

He says OUTA’s message to NERSA next week “will highlight how we have pleaded in the past, and NERSA has chosen to ignore our pleadings and has, in our humble opinion, not acted properly and diligently in the execution of its duties. We will endeavour to hold NERSA to book, and act where we believe NERSA has failed”.

Is Eskom’s business model sustainable?

“The energy sector is currently undergoing a transformation, led by climate change and the need to become more energy efficient,” says Nicolette Pombo-van Zyl, editor of ESI Africa, leading power journal and online portal on the continent. She adds: “the traditional customer base are becoming prosumers by installing rooftop PV systems and the debut game-changing technologies, such as smart metering and electric vehicles (which will require charging stations).”

“With this in mind it can be argued that Eskom should rather implement changes in its business model rather than request tariff increases. But, what is often overlooked is that Eskom must not only ensure there is sufficient energy generated and available during peak times, it is also the guardian of an extensive network of transmission and distribution infrastructure – this needs to be funded.”

Solar energy as alternative

OUTA energy spokesperson Ted Blom is a big supporter of solar energy as an alternative: “new solar (household and business) can be installed in days/weeks at very affordable prices and the payback is shorter than three years. Thereafter the electricity is free for up to 25 years.”

“My estimate is that Eskom will be applying for another R80 bn price clawback in the next 24 months (vs R22bn now) which will effectively require another 32% plus price increase before 2018. That will be on top of further operational cost increases in coal and transport – two cost elements Eskom has not shown in the past that it can control and which increased by average of 20% plus year on year.”

African Utility Week

Some 250 energy experts, including Ted Blom, will lead the debate as speakers on Africa’s current energy challenges and successes at the annual African Utility Week conference and expo from 17-19 May at the CTICC in Cape Town. Energy Efficiency, Renewable Energy and Generation will form part of the six conference tracks that will take place over the three days.  Some 6000 engineers, stakeholders and solution providers from around the globe will gather for the 16th edition of this annual power event.

In addition to the conference, Solar World, Zest, City Power, Yokogawa will be amongst the 250 exhibitors that will showcase their energy and water management and saving technologies. The trade exhibition will be free when registering in advance and feature hands-on demonstrations and CPD-accredited technical workshops on the exhibition floor. The event will also feature technical site visits and the coveted industry awards gala dinner.

ESI Africa, a leading industry trade magazine providing news, views and superior information to Africa’s power sector, is the premium media partner to African Utility Week.

African Utility Week and Clean Power Africa are organised by Spintelligent, leading Cape Town-based trade exhibition and conference organiser, and the African office of Clarion Events Ltd, based in the UK. The event forms part of a global energy event series, including European Utility Week, Australian Utility Week, Asian Utility Week and Latin American Utility Week. Other African flagship events in Spintelligent’s power portfolio are East African Power Industry Convention (EAPIC), West African Power Industry Convention (WAPIC), iPAD Rwanda Power & Mining Investment Forum and iPAD Cameroon Energy & Infrastructure Forum.

Dates for African Utility Week and Clean Power Africa 2016:
Conference and expo: 17-19 May 2016
Awards gala dinner:  18 May 2016
Site visits: 20 May 2016
Location: CTICC, Cape Town, South Africa

Linkedin: African Power Forum

Communications manager:  Annemarie Roodbol
Telephone:  +27 21 700 3558
mobile:  +27 82 562 7844

Benin Disco to move forward with smart meters plan

In Nigeria, the Benin Electricity Distribution Company (BEDC) has earmarked $13,5 million for the procurement of smart meters for over 741,000 customers in its network, this is according to CEO, Funke Osibodu, The Nation reported.

BEDC to receive much needed maintenance

Osibodu said that installations for over 100,000 customers will commence in the first phase, adding that measures were being implemented to tackle the challenges around the operations, maintenance, and human resources, which it inherited from the defunct Power Holding Company of Nigeria (PHCN).

Some of these issues extend to include aging systems, which have been poorly maintained, unreliable and overloaded systems, low demand side management (DSM) initiatives, corporate governance challenges, lack of technology interventions to reduce revenue leakage and lack of skilled manpower, The Nation reported.

Osibodu added that since utility takeover in November 2013, several upgrades have been implemented, with significant improvements made with regards to safety practices and unsafe network for the public.

Smart meters: funds to make a difference

Osibodu was optimistic that the $13,5 million smart meters project investment will adequately address customers meter challenges, media reported.

“We don’t have control over generation and transmission. We are like collection agents for the entire power industry. Across the power supply value chain in the Nigeria Electricity Supply Industry (NESI), we collect the entire money but just get 25 per cent of the total collections.

“Once we collect the billing from the customers, the generation companies (GenCos) get 60 per cent and pays the gas suppliers, Transmission Company of Nigeria (TCN) gets 11 per cent, while the regulator, bulk trader and market operator get the remaining four per cent,” she said.

She added: “We are directed to meter all our customers within one year, but we are constrained by the limit of capital expenditure (capex) that we can invest. We at BEDC cannot spend above N4 billion per year as capital expenditure and if we invest above that, we won’t be able to recover our investment due to the present tariff structure.”