Energy Minister Jeff Radebe has pinpointed energy efficiency as the short term answer to balancing electricity supply and demand.
Speaking at the Southern African Ministerial panel at the 8th annual DLO Africa Power Roundtable in Johannesburg on Tuesday the minister said energy efficiency was the country’s best hope.
“It is a fact that a successful energy efficiency programme results in the reduction of municipal revenues and we would be doing municipalities a disservice if we did not confront this problem,” Radebe said.
Rewards to cover the cos of reduced revenue
He added that the contradiction between a successful energy efficiency campaign and reduced municipal revenues needed to be addressed, through a revenue decoupling approach. Under this, municipalities need to be rewarded to the extent of the revenue loss that emanates from energy efficiency.
“Without this instrument being offered to municipalities, they will be inclined to resist energy efficiency and not implement the initiatives because they result in revenue loss,” he said, adding that energy efficiency technologies have a potential to create jobs.
The Minister’s comments come as South Africans have experienced up to Stage 4 load shedding over the last nine days due to shortages in capacity.
Earlier this week, power utility Eskom announced that the electricity system is gradually improving with no load shedding anticipated this week. However, it did highlight that the risk of load shedding remains as the system continues to be vulnerable.
Addressing capacity challenges
The Minister also spoke of the need to address electricity capacity challenges.
“Besides the operational issues afflicting Eskom power plants, the financial challenges are paramount and one has to recognise the bold leadership required with regard to the sectoral reform [as] imperative,” said Radebe.
The DLO Africa Power Roundtable is a platform that hosts various gatherings of government, key investors and stakeholders in Africa’s energy sector with the objective of encouraging investment in Africa’s power sector.