• Gauteng NGO Briefing - Eskom Electricity Pricing Application (MYPD3)


    SANGONeT invites NGOs and other civil society groups in Gauteng to a briefing session with Eskom on Monday, 26 November 2012, in Johannesburg.

    Eskom submitted its third revenue and tariff structure application for the next Multi-Year Price Determination (MYPD 3) to the National Energy Regulator of South Africa (Nersa) on 18 October 2012. The current three-year MYPD 2 comes to an end in March 2013. Eskom is proposing a five-year determination for MYPD 3, running from 1 April 2013 to 31 March 2018, with electricity tariffs to increase by 16% per annum during this period. The increase represents a total price increase from the current 61 cents per kilowatt hour in 2012/13 to 128 cents per kilowatt hour in 2017/18. Eskom states that it needs the tariff increases to recover the cost of producing electricity, finance its expansion programmes and service its debt.

    Many stakeholders across the business and civil society spectrum have already stated their concerns about the proposed tariff increases.  From a civil society perspective, organisations such as Greenpeace, groundWork, Earthlife Africa and others are at the forefront of questioning the merits of the Eskom application and the implications for all South Africans should it be approved.

    South Africa needs a reliable and stable energy supply to grow the economy and respond to its vast development challenges. At the same time, most South Africans are already feeling the strain of the ever-increasing cost of living.

    The challenge is how to meet South Africa's energy requirements in the best interest of all South Africans - "we need to keep the lights on, but at what cost?"

    Now that Eskom has made its submission to Nersa, an extensive public consultation process will follow until Nersa makes its determination in March 2013. Nersa will convene public hearings in all provinces from 15-31 January 2013.

    The event on 26 November 2012 (10h00 - 13h00) will provide Eskom the opportunity to present a detailed overview of its application, and NGOs the opportunity to develop a thorough understanding of the application and the Nersa process to follow. It will also be an opportunity for NGOs to directly engage Eskom management, highlight issues for clarification and raise concerns about the potential implications of the proposed tariff increases.

    Amongst other things, Eskom highlighted the following information in its MYPD3 presentation:

    • Residential customers using over 3000kWh will face a 35% increase - projected over 5 years the compound increase will be 348%;
    • Industrial and commercial customers face increases at least 21% - over 5  years the compound increase will be 159%;
    • Municipalities face a 13% increase and, based on past experience, will substantially increase the margin which they charge customers;
    • The increases of 16% include 3% to be used to subsidise the buying of electricity from independent power producers (described as IPPs).
    However, some of the key issues not covered include:
    • What would consumer prices for electricity be if SA had competing private electricity suppliers?
    • How much could the financing burden on government be lifted if all new supply was provided by IPPs?
    • How much would SA’s GDP increase if we had an adequate electricity supply?
    • What will be the impact of the increase on job creation, the competitiveness of the manufacturing and mining sectors, inflation, the poor, etc.?
    If you are not in a position to attend the event, please forward any questions or issues for clarification to be raised at the event to -

    RSVP by Friday, 23 November 2012:

    Dipuo Mahanyele, SANGONeT, Tel: 011 403 4935, E-mail:

    Venue details:

    Wanderers Club
    21 North Street
    Illovo, Johannesburg
    GPS Location: S 26 08.123 / E 28 03.454

    A light lunch and refreshments will be served at the end of the event.


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  • Govt’s Proposed Electricity Mix Criticised

    The government’s integrated resource plan (IRP) for this year has been heavily criticised, largely by civil society, which say it would be disastrous for the economy and the environment.

    A number of NGOs and community groups, which participated in the Department of Energy public hearings recently, called on the state to scrap the plan and to start the process again.

    They are not happy with the IRP, a 20-year electricity plan, because it includes coal and nuclear an d the majority of these organisations prefer the plan to rely mainly on renewable energy.

    To read the article titled, “NGOs slam government’s proposed electricity mix,” click here.
    Independent Online
  • An Uncertain Future: Law Enforcement, National Security and Climate Change

    Climate change has the potential to cause radical changes in lifestyle and mass migration as people seek out ever-diminishing resources. The tensions that will accompany such shifts could be profound as communities react to large influxes of newcomers and people struggle to adapt to ever more severe weather events. This in turn could place an ever-increasing burden on national security forces as they seek to maintain stability domestically and with bordering nations.

    ‘An Uncertain Future: Enforcement, National Security and Climate Change’ not only explores the social tensions in depth that could arise from climate change, but details the possible challenges for national security, the police and the military.

    For more information, click here.
  • World Bank Approves Loan to Eskom

    The World Bank has approved the granting of a R27 billion loan that will help the state power utility Eskom to build its Medupi Power Station in Limpopo.

    In a press statement, the World Bank says its board of executive directors had approved the loan ‘to help South Africa achieve a reliable electricity supply while also financing some of the biggest solar and wind power plants in the developing world’.

    The bank further says that the loan is its first major lending engagement with South Africa since the fall of apartheid 16 years ago.

    "The loan is provided to South Africa's power utility, Eskom, and is brought about by unique circumstances including South Africa's energy crisis of 2007 and early 2008, and the global financial crisis that exposed the country's vulnerability to an energy shock and severe economic consequences," it explains.

    To read the article titled, “World Bank approves Eskom loan,” click here.
    Mail and Guardian
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  • World Bank's Climate and Governance Disaster

    Press Release

    8 April 2010

    Both Earthlife Africa Johannesburg and groundWork, Friends of the Earth, South Africa are disappointed with the World Bank's decision to go ahead with its loan to Eskom. By making this decision, the World Bank has shown, quite clearly, that it has no regard for the state of the world's climate and environment, the future of South Africa, and economic principles of transparency and corruption. The World Bank is not a responsible lender.

    The Medupi power station will put out about 30 million tons of CO2 per annum and, at a time when the world desperately needs to reduce global greenhouse gas emissions, the World Bank is actively funding coal. This is an assault on the livelihoods and way of life of global citizenry. Instead of using its financial resources to help developing economies leapfrog from carbon intensive development and promoting investment in clean and ultimately cheaper alternatives, such as wind and solar, the World Bank is propagating “business as usual”. This is akin to fighting a fire with petrol.

    Tristen Taylor, Project Coordinator of Earthlife Africa Johannesburg, states, "Twenty years from now, people will look back and see this loan as a missed opportunity to change the world for the better. Eskom and the World Bank have made a monumental failure to appreciate not only the dire circumstances that humanity finds itself in but also the possibility of alternative, cleaner, and more efficient development. Today's children will judge them harshly in the years to come."

    According to both local and international research, Southern Africa will be one of the hardest hit areas of the world as the climate warms. We will see droughts, species extinction, food shortages and spreading of diseases such as malaria. We will pay for this loan, not only in dollars, but also in the overall health and welfare of South Africa. The World Bank and its supporters do not have South Africa's long-term interests at heart.

    As the loan is dollar based, this means that South Africa not only has a significant repayment risk in terms of currency exchange rates (if the Rand weakens to the dollar, the size of this loan will increase) but is also now forced to earn foreign currency to pay back this loan. The result will be a further entrenching of an export-orientated economy in raw materials; an economic model that has consistently failed, for the last hundred years, to eradicate poverty in the country. Paradoxically, an export-economy based on raw minerals extraction requires cheap electricity, thus deepening Eskom's revenue woes. Essentially, the easy path of World Bank money will come at a high cost in the decades to come.

    Further, the World Bank seems to be completely unconcerned about the future water supply and air quality around Medupi. Bobby Peek, Director of groundWork, Friends of the Earth South Africa warns that, “the environmental and social cost of this development will impact on all South Africans as three major water catchments, the Limpopo, Vaal and Senque (Orange) River are all going to have their water diverted for Medupi and future power stations.  Already our government has agreed that the Waterberg will exceed its air pollution carrying capacity in future.  Not only is this area going to be a sacrifice zone, the entire country will, and the World Bank knows this but chooses to ignore it. They will be held accountable.”

    Apart from these critical issues, the World Bank has made a complete mockery of own efforts to tackle corruption and promote good governance. The ruling party will benefit financially from the completion of Medupi (through its Chancellor House investment in Hitachi Power Africa) and hence the loan. What is the World Bank saying about open democracy and financial accountability? Nothing. Apparently not only is it okay for the World Bank to make this loan, in full knowledge of the ANC's windfall, the World Bank thinks that it is right and proper for the people of South Africa to pay back that loan, not the ANC.

    For more information, please contact:
    Bobby Peek
    Director, groundWork
    Cell: +27 82 464 1383

    Tristen Taylor
    Project Coordinator
    Earthlife Africa Jhb
    Tel: +27 11 339 3662
    Fax: +27 11 339 3270
    Cell: +27 84 250 2434
    Date published: 
  • SA Commemorates the Earth Hour

    On Saturday night, a global community supported Earth Hour and switched off lights for 60 minutes to mark the importance of creating awareness about electricity consumption and carbon emissions.

    The Department of Environmental Affairs marked the event by switching off the lights at its Pretoria office.

    The department spokesperson, Albi Modise, says to ensure the staff’s participation, it hosted, an Earth Hour Information Session for staff members to heighten awareness and generate interest internally.

    Earth Hour, a climate change initiative by the World Wide Fund for Nature (WWF), first started in Sydney, Australia, in 2007.

    To read the article titled, “SA switches off lights for an hour,” click here.
    The Citizen
  • NGOs Criticise World Bank Loan to Eskom

    The World Bank has defended its proposed R29 billion loan to Eskom amid growing criticism from environmental groups and NGOs.

    The NGOs, Climate Justice Now, groundWork and the Federation for a Sustainable Environment, have criticised the loan, supported by the National Union of Metalworkers of South Africa and the South African Council of Churches.

    They say if it is approved, the poor will bear the burden of Eskom debt.

    Meanwhile, Eskom finance director, Paul O’Flaherty, says the company had already factored the World Bank loan into the funding plan it submitted to National Energy Regulator of South Africa (NERSA) as part of its application for tariff increases.

    To read the article titled, “World Bank defends loan to Eskom,” click here.
    Business Day
  • Statement from South Africa and CSOs on Eskom’s Proposed US$3.75 Billion World Bank Loan

    Press Release

    12 February 2010

    Should the World Bank grant a US$3.75 billion (R28.125 bn) loan to Eskom when the Bank Board meets on March 24? No. We South African and African organisations which for years have advocated social and environmental justice here and abroad, oppose Eskom’s proposed Bank loan – and indeed its new construction programme more generally, for several reasons.

     1) A bad project, contributing to energy poverty and environmental destruction. This particular project is fatally flawed, on grounds that Eskom’s strategy is:

    based primarily on large coal-fired stations (followed by nuclear) and as many as 40 new coal mines, which will add to South Africa’s already extremely high carbon intensity, as well as the air pollution and degradation of scarce water resources;
    Designed to continue supplying the world’s cheapest electricity mainly to large energy-intensive industries, including steel and aluminium, whose corporations are headquartered abroad (hence contributing to the profits outflow on South Africa’s balance of payments);
    To be mainly paid for by unaffordable tariff increases imposed on ordinary South Africans, while the beneficiaries – the largest industrial consumers - are exempt from price rises because of multi-decade special purchase agreements offered to them during apartheid and in the 1990’s; and as a result,
    Unable to alleviate ‘energy poverty’, but instead entrenches suffering by imposing ‘cost recovery’ on people who cannot afford it, with Eskom already admitting a ‘typical township household’ will face a 2009-2012 monthly price rise from R360 (US$48) to R1000 (US$130).
    2) Inappropriate financing. We therefore oppose all funding, foreign and local, for Eskom’s coal/nuclear expansion plans. Were Eskom to engage in a reasonable energy policy based on demand management, with supply shifting to renewable, and the expansion of Free Basic Electricity beyond the current tokenism as well as connections to urban shackdwellers and the rural poor, that would be worthy of support. As for green energy investments that are not import-intensive, local financing would be more appropriate than a World Bank loan - and is readily available, including through state debt and halting subidised electricity contracts to multinationals. The financial danger of a World Bank loan is that the SA currency will crash (as it has five times since 1996), hence making repayment much more expensive (since the loans are not repaid in rand but in dollars), hence adding to the extreme cost burden poor South Africans will face.

     3) Eskom’s special responsibility to Africa. We must not forget that South Africa consumes more than its fair share of Africa’s environmental space for development (more than 40% of CO2 emissions from just 6% of Africans), mainly because of Eskom, Sasol and other large corporations which emit the vast bulk of greenhouse gases. The World Bank loan will sink Eskom – and South Africa - into not only financial debt to the West, but much deeper ‘Climate Debt’ to Africa. African civil society unites with SA critics of Eskom’s irresponsible climate-denialist projects.

     4) The World Bank’s special responsibility. Specifically, we oppose World Bank funding for Eskom and call on all governments with Bank voting power to oppose the proposed loan on March 24, when the Board meets. The World Bank has still not offered reparations for its 1951-67 apartheid-empowering loans to Eskom, for which only white people received electricity (but the entire society repaid the loans). Further, the Bank has consistently promoted privatisation and/or commercialisation of state utilities and cost-recovery (resulting in disconnections), which together prevent access to electricity by poor South Africans. We call on the Bank’s member governments and directors to endorse the recommendations of the 2004 World Bank Extractive Industries Review. The Review found that, aside from climate damage, the Bank’s fossil fuel projects had neither the intention nor the effect of alleviating poverty and called for them to be phased out.

    5. The US government’s special responsibility. We especially call on the US Treasury – which has opposed Bank coal financing in line with a recent ‘Guidance Note’ – to veto the proposed loan, and to also halt US government subsidies to the coal industry so as to avoid the legitimate charge against Washington of hypocrisy. We are delighted about three processes internal to the US, which are a model for our own work in South Africa: Sierra Club legal action has prevented new coal-fired plants from being built; courageous activists in West Virginia are engaged in direct action to halt ‘mountaintop coal removals’; and the US Environmental Protection Agency adopted December 2009 provisions to implement its ‘endangerment finding’ that carbon from coal is a pollutant and must be directly regulated. What must be avoided is the US imposing responsibility for carbon cuts on the South, but without providing funding or technology support for renewable energies as part of the ‘Climate Debt’ that the US owes for taking up so much environmental space. World Bank Executive Directors representing the South have responded to the US Guidance Note making several of these points, and they oppose the use of the Bank as an instrument of US power. This is a fair point, and a long-standing grievance we all share, given Washington’s extremely destructive role at the Bank and in the world economy.
    Nevertheless, the dissident Executive Directors’ response supports further Bank funding for fossil energy and specifically coal-fired power stations, justifying coal as necessary for poverty alleviation and economic growth in developing countries. In reality, economic growth has been accompanied by growing inequality in South Africa and many other countries that suffer ‘resource curse’. The poor are mostly left worse off than before. Even where their income improves by conventional measures, the gains are lost to services cost recovery (and disconnections), to health costs imposed by pollution, to the loss of nonrenewable resources, to water/land theft associated with coal-fired power, and to the increased cost of access to amenities previously provided as public goods. In addition, it is common cause that the poor are most vulnerable to climate change. In many countries, they are already feeling the costs in intensified droughts and floods and in the loss of land through coastal erosion.

     6) Towards the transformation of energy, production and financing. We see renewable energy, not coal-fired power stations, as the optimal development path for Southern economies, creating more jobs, building local manufacturing capacity, and avoiding the environmental mistakes of Northern countries. As in South Africa, most World Bank coal power projects are designed to supply industry, not people. They do not necessarily increase per capita access to energy. The industries in turn are mostly geared for export in line with the World Bank’s promotion of export oriented production. The goods are then consumed primarily in developed countries. Further, many industries are established with foreign direct investments. In the process, much of the heavy industry in developed countries has relocated to developing countries in search of cheaper energy and cheaper labour. Yet because their headquarters are in London, Melbourne, New York, Toronto, Zurich and other offshore sites, a substantial portion of profits is returned to rich countries, exacerbating the poor countries’ balance of payments deficit. Because South Africa’s payments deficit is so extreme, due to the outflow of profits and dividends to foreign corporations which benefit from the world’s cheapest electricity, The Economist magazine judged the country as the world’s riskiest emerging market (24 February 2009).
    7) The demand side management alternative. Instead of expanding its coal/nuclear facilities, Eskom should engage in serious demand side management, beginning by phasing out electricity to smelters that have little linkage with the South African economy and that are capital- rather than jobs-intensive. Concrete plans should be made for a ‘just transition’, so as to provide alternative, well-paid ‘green jobs’ – e.g. in subsidised thermal-solar geysers for every house – to those workers who are employed at the smelters. At the same time, the special purchase agreements should be disclosed to the public and opened for renegotiation. The freed up energy should be redistributed to provide for a much larger ‘lifeline’ supply of universal Free Basic Electricity – with a rising block tariff to encourage conservation to improve spinning margins which will buy time for a switch into renewable energy technologies. By not expanding its coal/nuclear facilities and instead redistributing the electricity capacity it has, and by simultaneously switching to renewable sources, Eskom can survive this crisis. But it can only do so if it is not in the clutches of the world’s leading financier of climate destruction, the World Bank.

    Makoma Lekalakala
    082 682 9177
    Date published: 
    Earthlife Africa
  • Integrity of NERSA Hearings Questioned

    The World Wide Fund for Nature (WWF) in South Africa has questioned the integrity of the National Energy Regulator of South Africa's (NERSA) public hearings into Eskom's proposed tariff hike.

    The WWF says it also questions the intentions behind the energy ministry's publication of a purported Integrated Resource Plan (IRP) on the last day of 2009.

    In a press statement, WWF points out that, "Minister of Energy Dipuo Peters has decreed, by way of the Government Gazette, the nature and timing of new electricity generation to be installed over the next five years.”

    It further says such a decision potentially removes the prospect for meaningful consideration of stakeholder input and interests into Eskom's controversial tariff increase applications.

    To read the article titled, “WWF questions integrity of NERSA hearings,” click here.
  • South Africa Joins IRENA

    South Africa has become a member of the International Renewable Energy Agency (IRENA), which aims to promote the use of renewable energy worldwide.

    The energy department says Minister Dipuo Peters signed the necessary paperwork in Abu Dhabi to become a member of the agency.

    In a press statement, Peters states that, "[This] will enable us to work with other countries to accelerate the introduction of renewable energy and to confront our vexing energy challenges.”

    To read the article titled, “SA joins renewable energy body,” click here.
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