DA welcomes comments by Minerals & Energy Minister on splitting the department

Gareth Morgan, DA Spokesperson on Environmental Affairs and Tourism
10 February 2009

The Democratic Alliance (DA) welcomes the comments by the Minister of Minerals and Energy, Buyelwa Sonjica, at a mining conference earlier today that she expects her department to be split in the near future. This is in line with the DA's recently revamped environment and energy policy, which has as one of its key focus areas the decoupling of mining and energy management, and the creation of a new Ministry of Energy and Climate Change. But the Minister need not stop there, as more needs to be done to fix the energy sector in South Africa.

For far too long the Minister's department has focused on mining at the expense of integrated energy planning. Mining is an important contributor to the GDP of our economy, but linking it so closely to energy has created perverse incentives for the South African government to continue down the path of high reliance on electricity from coal.

Freeing the management of our energy planning from mining will allow the government to concentrate on diversifying our energy supply. The DA hopes that if this happens the new department will work to foster an environment where there is a massive uptake of microgeneration, particularly from renewable energy sources.

In line with the DA's vision to create new opportunities in the energy sector, we urge the government to go further than just decoupling mining management from energy management. There needs to be a complete rethink about state involvement in energy production and transmission.

The DA would make two further interventions to improve the governance of energy in South Africa:

1) The natural monopoly of transmission of electricity needs to be unbundled from the potentially competitive activity of generation. Eskom's transmission division must be transformed into a separate state-owned company to ensure that all sector participants receive equal access to the national grid. Conditions that enable regulated third parties, such as foreign and domestic independent power producers (IPP), equal access to the transmission system must be created. IPPs will increasingly be attracted to the sector if Eskom does not own the national grid.

2) The DA would revoke Eskom's designation as the single-buyer of electricity: While provision is currently made for IPPs to generate up to 30% of South Africa's total electricity output, the electricity generated must be sold to Eskom and not to any other users.

In order to sustain a growing South African economy, to mitigate climate change and to alleviate poverty, the governance of energy needs a complete overhaul.