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South Africa: Power Crisis
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Business Day (Johannesburg)
EDITORIAL
25 January 2008
Posted to the web 25 January 2008
Johannesburg
TWO weeks into the load-shedding crisis, the focus is increasingly turning to the question of solutions. That is welcome and constructive.
Of course, it's a pity that it takes a crisis to get everyone to look more seriously at measures that should have been put in place long ago: co-generation, for example, where the heat generated as a by-product of industrial processes in sectors such as chemicals is captured to produce power that can be used by the industries themselves, or bought by Eskom for the national grid.
And even though alternative energy sources such as solar power may be able to contribute only a small part of SA's power needs, it's likely they will now be taken more seriously and that is important. As will the demand-side management arrangements with large industrial users that Eskom had starting putting in place some time ago.
But as long as the power system remains vulnerable, as it will for the next five to seven years until big new power stations start to come on line, the main solution will have to be rationing. The only question probably is not whether, but how to ration. Eskom says it would like to see cuts of 10%- 20% in power consumption. The power utility and others are talking about a system that would impose power rations on all users, industrial, commercial and residential. Actually, we are already on power rations: load-shedding is precisely a form of rationing, one Eskom imposes at times when supply runs too short to meet demand. The trouble, as an article on these pages argued yesterday, is that load-shedding is the most inefficient way of rationing scarce power supplies.
We can all attest to that, after days of unpredictable and haphazard rolling blackouts. Even blackouts that were carefully planned and well communicated would be intensely disruptive: but we haven't even had that. Electricity supply has simply become wildly unreliable. "Unreliable power disrupts production, damages equipment, causes personal discomfort, increases the cost of doing business, deteriorates the investment climate and, in the medium term, hurts job creation and economic development," says a World Bank study of how energy shortages have been addressed in Brazil, California and elsewhere.
Instead of rationing by rolling blackouts (or what Eskom calls load-shedding), the World Bank recommends rationing through price signals -- which is what's now under discussion here.
Brazil is the best example. The idea is that all users must cut electricity consumption to, say, 80% of their average usage in the past year. If they use more than that, they pay penalty tariffs. If they use less, they get tariff discounts. Simple.
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And simplicity will be essential if SA is to impose such a system. It must run on existing billing systems and use existing resources. There must be no fancy bells and whistles that only skilled people can monitor: we don't have skilled people to do it. Nor should the system include complex incentives that are open to abuse by officials or by businesses. So, for example, even the possibility of trading electricity entitlements -- something Brazil had -- might be a risk here. The system must not try to meet multiple objectives, just the one of rationing power in a way that gives households and businesses strong financial incentives to save electricity, and enables them to plan their lives, instead of facing constant power outages. It will need sensible and firm leadership. But it may be the only option.
South African president to be Zuma, says that the Zimbabwean situation is being hampered by the West's involvement. This is the sign of things to come in South Africa very soon when your future president will find fault in everybody and everything else for South Africa's woes. He and his thugs will conveniently avoid accepting the fact that incompetent people are always incompetent no matter whether you are white or black. Mugabe and his thugs are incompetent. South africa is already starting to show signs of gross incompetence, with power cuts and soon the expected African cry will be "its... [Read Full Text]
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