Energy Efficiency & Demand Side Management

S.Africa: Mid-term budget speech rocks energy market |

S.Africa: Mid-term budget speech rocks energy market <…> October 25, 2018 0 <> [image: mid-term budget] <>Featured image: Green Building Africa
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*In his mid-term budget speech, South Africa’s finance minister, Tito Mboweni, let loose an electricity sector bombshell promoting free-market pricing and decentralise private grid operators.*
He stated that a new national electricity grid could be established with independent power producers. This is the first sign that Government is now considering partial decentralisation of electricity production, transmission and distribution – outside of state-owned utility Eskom.
Electricity can be produced, transmitted and distributed by IPP’s. These IPP’s are currently creating 61,000 jobs as a result of the finalisation of Round 4, the country’s renewable energy programme (REIPPP). Electricity tariffs scorching the country
Mboweni also stated that electricity prices could be set free. Government is considering long-term reforms in electricity. “Reviews of administered prices in other sectors such as energy are underway,” Mboweni confirm.
However, it is unclear whether this would mean that electricity pricing will be determined on an open market.
These two bombshell announcements lead into one another as the market determines electricity tariffs in a competitive decentralise supply network. If such a move does go ahead, it will unlock significant investment in the South African energy sector and could mean lower electricity prices.

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