ESTABLISHMENT OF A FEED-IN TARIFF TO FINANCE RENEWABLE ENERGY

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

South Africa is sitting on a wealth of energy production potential. I am not talking about coal, that dirty fossil fuel that already contributes to the generation of over 80% of electricity, but about renewable energy. Solar, wind, biomass, tidal and other sources of renewable energy are untapped in this country, which is a shame considering that our electricity reserve margins are so low.

The legislative proposal for a feed-in-tariff on renewable energy is an excellent initiative that was brought to parliament by my colleague, Ruth Rabinowitz. Although it is in her name, the initiative is supported by a bi-partisan group of MPs, as well as hundreds of private citizens and business stakeholders. In fact, I have personally corresponded with over 400 businesses and individuals who support this proposal.

This legislative proposal was opposed by the Department of Minerals and Energy because it believed that the required legislation for a feed-in-tariff was already in place. The question then is why has this country made practically no progress on renewable energy in the last decade. It is because the South African government is fixated with large state-driven energy projects which limit choice and have, in effect, contributed to undermining GDP growth. Further, it is because our state energy planners believe that just because we have 200 years of coal reserves available we have to use these resources. Not only is this latter view nonsense, it is irresponsible.

The subject of the appropriate role of the state is often a debate in this House, yet this debate has not been sufficiently directed at the role of the state in the energy economy. Naturally there is an important role for the state in conducting integrated energy planning, something which has been severely lacking over the last decade, and which has been a major cause of insufficient generating capacity during several periods over the last three years. However, the state, more particularly Eskom, needs to understand that it cannot be the sole producer of electricity to satisfy the needs of a growing economy – it does not have the skills nor does it have access to the required capital.

The DA believes that the state’s primary role, besides planning, is to appropriately regulate the energy sector and to provide incentives for an increased number of players in electricity production. Yes, it will be necessary for some time to come that Eskom remains the primary generator of electricity. However, it is the policy of the DA that the natural monopoly of transmission 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.

And this is where the feed-in-tariff for renewable energy will truly thrive. It will allow a massive increase in micro-generation, increasingly giving individuals, businesses, and rural communities that are currently off-grid, improved energy independence. Honourable members, the feed-in-tariff for renewable energy is a sensible and progressive policy.

Renewable energy must not be treated as an after thought in energy planning. It must become central to energy planning.  The DA believes that a target of 15% of electricity generation from new renewable energy sources is achievable by 2020. Not only will a renewable energy revolution help to mitigate climate change it will be a source of new “green” jobs. A 2008 report from World Watch, entitled “Jobs in Renewable Energy Expanding” shows the potential for new job creation. There are, for example, 259 000 jobs in the renewable energy sector in Germany.  South Africa can be one of the top ten producers of renewable energy in the world, and we can create new jobs in the thousands as well.

The feed-in-tariff for renewable energy is the way to stimulate this market. But not only is the existence of the tariff important, but the tariff must be set correctly. NERSA currently has proposals on a feed-in-tariff up for discussion. We must thank them for trying, but regrettably the tariff proposals are far too low and will not offer the required stimulus.

I hope that this legislative proposal can be revived under the new parliament. I believe that this institution must be centrally involved in providing a specific legislative framework for renewable energy and that the state, whether DME, Eskom, or NERSA, should not be left alone to manage these matters.