April 2014

Municipal reliance on electricity tariffs ‘impedes growth of small-scale generation’

MUNICIPALITIES’ reliance on electricity tariffs for much of their revenue is holding back the expansion of small-scale energy production, Western Cape climate change and biodiversity director Helen Davies said on Monday.

The province, which aims to be South Africa’s lowest carbon-emitting province per capita, is scoping research into other ways for municipalities to generate revenue, she said.

Ms Davies was responding to the Intergovernmental Panel on Climate Change’s (IPCC’s) plea to the world to reduce the emission of greenhouse gases, related to climate change, from electricity production.


This would give the world wriggle room while it made the major industrial and technological changes, without which it would not have a “better than even” chance to avoid damaging climate change, the IPCC said in its third and final working group report, released in Berlin, Germany, on Sunday.

“The challenge for us is that although the Western Cape has (nuclear power plant) Koeberg, we get our power via distribution lines from the north,” Ms Davies said.

Nuclear power generation is free of greenhouse gas emissions, while most of South Africa’s electricity is generated in coal-fired power stations. Coal is the world’s dirtiest power source in terms of emissions.

The Western Cape is trying to expand large-scale renewable energy installations through the Department of Energy’s renewable energy independent power producer programme, Ms Davies said. It is also training its thoughts on small-scale embedded (own use) generation.

One of the barriers to small-scale embedded generation is the effect it has on municipal revenue collection, which means there is no incentive for municipalities to encourage its use, she said.

South African Wind Energy Association CEO Johan van den Berg said municipalities funded themselves “to a large extent” through mark-ups on Eskom’s energy tariffs, which meant that encouraging small-scale generation and entering agreements with large independent producers would cut a viable revenue stream. It would also diminish their ability to cross-subsidise free energy to the poor.

The Western Cape is trying to work with municipalities to help them understand their own sustainable energy options and to plan accordingly.

The province does not want municipalities planning for “business as usual” when they draw up their electricity master plans, Ms Davies said.

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