Minister and Department of Energy on the Integrated National Electrification Programme

Energy

08 February 2011
Chairperson: Mr S Njikelana (ANC)
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Meeting Summary

The Minister of Energy highlighted the various challenges of the Department and said it was important to provide electricity to all South Africans because, at present, only 75% of the population had access to electricity. The main areas where serious challenges were identified were KwaZulu-Natal, Limpopo, and the Eastern Cape. Political interference in KwaZulu-Natal and misalignment of finances in the Eastern Cape were a major challenge. The Minister asked the Committee’s support in order to reach the2014 target while the Department had to come up with strategies on how to take money from non-spending municipalities and give it to municipalities that were spending.

The Department presented its briefing on the Integrated National Electrification Programme.  During 2001 Government took responsibility for funding the electrification programme and the funds were made available from the fiscus. The new drive was to increase access to electricity from 81% to 92% by 2014.The objective of the Integrated National Electrification Programme was to manage the electrification planning, funding and implementation process, with the aim of addressing the electrification backlog so as to reach universal access. The focus of this presentation was on the generation of electricity, municipalities and the distribution substations. The percentage of houses with no electricity were 24% in KwaZulu-Natal, 21.11% in Gauteng, 19.88% in the Eastern Cape, 10.04% in Limpopo, 6.57% in Mpumalanga, 5.92% in the Free State, 5.69% in the North West, 5.32% in the Western Cape, and 1.46% in the Northern Cape The Department encountered challenges in achieving universal access: minimum or no investment by respective distributors in the operation; lack of  maintenance of the electricity infrastructure; ageing electricity infrastructure; insufficient programme funding; the building of new bulk infrastructure in rural areas; limited or lack of adequate skills at local government level for operation and maintenance of electricity infrastructure; the building of municipal capacity without negative impact on service delivery;  technology innovations  and the integration of other sources of energy; challenges in Project and Resource Management; and vandalism.

Members expressed their appreciation and acknowledged the work been done by the Department since 1994. Members asked if dysfunctional municipalities were checked and expressed concerns regarding the state of electricity infrastructure. Members noted that 75% of households were electrified and asked which households would be electrified by grid connections from the remaining 25%. Members were concerned about the lack of strategic planning in the presentation and the political interference which blocked service delivery. Members noted that the Minister managed to expand various programmes but saw a lack of publicity on what had been done.

Meeting report

Introduction by the Hon. Ms Dipuo Peters, Minister of Energy
The Minister thanked the Portfolio Committee for the opportunity to present the Department’s Integrated National Electrification Programme (INEP). She said that it was the mandate of the Department to provide a better life for all South Africans. It was of vital importance for the entity to provide electricity to all communities because only 75% of the South African population currently had electricity. There were still various challenges in providing electricity to some communities in KwaZulu- Natal (KZN), Limpopo and the Eastern Cape. Areas with serious challenges had been identified and one of the major challenges had to do with misalignment of finances. The Department had to come up with strategies on how it was going to take money from non-spending to spending municipalities.  The Department encountered challenges with its capacity to fulfil its mandate to its capacity. It encountered challenges on how it would give budget where housing units were not built yet. Political interference in KZN caused political “islands” and support was needed from the Portfolio Committee to increase the size of the budget because the Department would not be able to reach its target by 2014 for lack of sufficient finances.

Department of Energy briefing on Integrated National Electrification Programme (INEP)
Mr Ompi Aphane, Acting Deputy Director-General (Acting DDG), Department of Energy, presented the Department's briefing on the Integrated National Electrification Programme. After the 1994, the electrification programme was endorsed as part of Government’s Reconstruction and Development Programme (RDP) initiative. During 2001 Government took responsibility for funding the electrification programme and the funds were made available from the fiscus. The new drive was to increase access to electricity from 81% to 92% by 2014. The objective of the INEP programme was to manage the electrifying planning, funding and implementation process, with the aim of addressing electrification backlog so as to reach universal access. The Department also monitored the programme in regard to the Division of Revenue Act (DoRA), and the Public Finance Management Act. The entity had to integrate electrification with other programmes like the Braking of New Ground and the eradication of informal settlements, and to ensure the full participation of local government in the planning and implementing process by using Integrated Development Plans (IDPs). The focus of this presentation was on the generation of electricity, municipalities and the distribution substations. The approach to universal access focused on schools and clinics, and the rural, urban and farm workers’ houses. Some informal settlements were capable of being supplied electricity, while others were unsuitable for electrification. Houses were very far apart in some terrains and it was expensive to provide electricity in those areas. The houses not electrified were 24% in KZN, 21.11% in Gauteng, 19.88% in the Eastern Cape, 10.04% in Limpopo, 6.57% in Mpumalanga, 5.92% in the Free State, 5.69% in the North West, 5.32% in the Western Cape, and 1.46% in the Northern Cape.

The Department had a budget allocation of R2 840 084 000. The total Medium Term Expenditure Framework (MTEF) allocation for municipalities was R1 020 104 000. It was R1 751 780 000 for Eskom, and R68 200 000 as non-grid allocation. The estimated connections for the total allocation were 190 000. The allocation criteria included projects with backlog status; electrification projects identified as part of the Integrated Development Planning (IDP) process; rural bias; development nodal zones which were identified as part of the Integrated Sustainable Rural Development Strategy (ISRDS) process; past performance or licensed distributors; existence of completed houses as a preferred scenario; proclaimed and un-proclaimed area status; and commitments not addressed during re-gazetting due to unavailability of funds.

The INEP short term objectives included the electrification of existing homes that were constructed within two years timeframe and no RDP programme should be completed without electricity. All political hotspots with service delivery protests should be identified and addressed. Breaking New Ground Projects (BNGs) in urban areas should relieve informal settlements with bulk projects and all identified BNGs in Metros and secondary cities should be prioritised.  All outstanding formal schools should be electrified in order to achieve universal access to schools. Constructed bulk projects should open up access in the specific targeted rural areas and the outcome was for those projects to be completed.  There were bulk projects where electrification could not proceed without upgrade. Eskom planned 95 726 connections up to December 2010 and only 58 078 were achieved. The municipal programme was allocated R1 096 612 000 while R190 250 000 were allocated for bulk infrastructure, and R725 593 550 were allocated for households budget (see attached document, slide 20).

The Department encountered various challenges in the electricity industry in South Africa in achieving universal access. There was minimum or no investment by respective distributors in the operation and maintenance of the electricity infrastructure to date, hence the lack of maintenance. The electricity infrastructure was ageing and there was insufficient programme funding. The Department needed to build new bulk infrastructure in rural areas and there was limited or lack of adequate skills at local government level for operation and maintenance of electricity infrastructure. The Department needed to build municipal capacity without negative impact on service delivery. There was a great need to focus on technology innovations and the integration of other sources of energy. There was also a challenge in project and resource Management.

Many systems in the non grid programme were vandalized. The Department’s mitigation process included social facilitation; the use of schools as community centres; the use of the system for cell phone charging for the community; innovative installations, security guards, and engaging stakeholders for the repair of vandalized systems. The Department believed that a target of 92% was feasible by 2014. The low backlog in municipalities and provinces would reach universal access by 2012/2013 financial year.  The metros and informal settlement strategies would provide more focus and differentiation from the rural strategy, and the bulk focus in the rural areas needed a more focused approach.

Discussion
Mr L Greyling (ID) noted that the Minister said that 75% of households were electrified. He asked which households would be electrified by grid connections from the remaining 25%. He worked with various communities in the Eastern Cape and noted that there was no support from Government for those people in getting electricity. Most people did not know how to get solar panels in the rural areas and he asked about the plans the Department had in place; how it would be done; and how it would be financed.

Mr J Schmidt (DA) asked if the dysfunctional municipalities were checked and wanted to know about the challenges of Eskom.

Mr S Radebe (ANC) expressed his appreciation and acknowledged the work been done by the Department since 1994. He asked if the Department was only working with municipalities through the IDP or were there any other stakeholders involved in Breaking New Ground. He asked if the Department considered electricity generation in the areas where current connections were expanded. He expressed his concern regarding electricity infrastructure and asked how refurbishment would take place. The free flow of electricity was disturbed by external factors like wind and rain and he did not believe that the solar panels only powered black and white television sets, and asked the Department to do proper research on the issue. He noted that the Minister managed to expand various programmes but he saw a lack of publicity on what had been done. He requested members of the Portfolio Committee to submit areas on which the Department did not focus.

Mr S Motau (DA) agreed with the Minister’s concern that the current budget would hamper the Department from achieving its 2014 target, and acknowledged that the entity needed more money.

Mr P Dexter (COPE) was in agreement with Mr Radebe on the progress made by the Department. He said that the Department was not usually treated as “politically sexy” and highlighted the challenges within Eskom as the main causal factor. He said that the presentation lacked a strategic plan and asked what could be done locally.

The Minister thanked members for their input and questions as it was important in taking the Department forward. She said the Department did identify ways of communicating more effectively. Some people who thought that home solar systems were inferior technology needed to change and the lack of user education created the notion that the systems were not working well. The home solar system was mainly targeted for areas with poverty and the system worked well in many communities. People testified about the effectiveness of the system and user education would help. Vandalism was a challenge because the equipment was very expensive. The Minister asked for support from the Committee in order to convey the message that the system was working well and regarding public education. Money was given to municipalities and municipalities distributed it accordingly. The Department provided public education on energy efficiency and the protection of resources.

The Minister was thankful that members express their appreciation on the work done since 1994 and believed that working together with the Portfolio Committee the Department would achieve its 2014/15 target. She said it was possible because the budget calculations had been done. The Minister agreed that there was a need to increase focus on universal access to electricity, and that every house built should have electricity. Electrical services were important in rural areas and could help in reducing crime because of the illumination. Electricity was as important as water and other resources which were seen as the backbone of a progressive economy.

Mr Aphane stated that the Department did consult other stakeholders and told Mr Radebe that solar panels could power black and white television sets, but the Department’s systems were too small too provide enough  power for colour sets.

Ms Nelisiwe Magubane, Director-General (DG), Department of Energy, said that the distribution network was dysfunctional and the Department was currently working to identify the worst issues and address the issues regarding cable theft.

Mr Greyling asked how he could inform communities in the rural areas about the assistance which was available.

Mr Radebe said that there should be no “islands” which block service delivery.

The Minister said the Department did engage with the government of KZN and convened an energy summit on how to provide universal access to electricity in the province. The distribution of energy in some parts of KZN was done in accordance to political affiliations. It was not acceptable and no political affiliation should be used to deliver services. She appealed to members of the Committee, especially those affiliated to the Inkatha Freedom Party (IFP), to assist in identifying and solving those problems. Municipalities had no power to use money for political agendas.

The Chairperson said it was good to have the briefing in the beginning of the year as it provided a good indication on the areas of focus and challenges. He understood that some of the areas of focus were on universal access and renewable energy; and he encouraged Members to submit further questions. He asked for more details regarding the socio-economic impact assessment and the high, medium, and low road strategies. He expressed his concern on the “island” syndrome in KZN and emphasised the role he had to play as a public representative in addressing the issue. He asked Members to continually engage with the Department and not wait for Committee meetings to communicate with the Department. The Department had to work more with other Departments and that would force the Portfolio Committee on Energy to work with other Committees. He thanked all Members who came to the meeting and advised them to direct all inputs to him.

The meeting was adjourned.  




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