Deregulation Archives - Medialternatives

by davidrobertlewis - August 30, 2024September 18, 2024

Open Energy To The Home (ETTH) to free those prepaid meters from ANC Monopoly Capital.

WHILE residents of Lavender Hill and Steenberg were protesting against prepaid meters and Cape Town City officials sought to blame Eskom for tariff increases — some 20 000 Capetonians attended a two day ‘Solar & Storage Convention’ at the CTICC. As an angry mob gathered along military road, the public were treated to demonstrations of solar power and storage solutions, with storage a key element missing from the debate on renewable energy, and a programme that include Internet of Things (IOT) and smart grids.

It is a stark contrast between those able to afford solar financing options (40k to 60k is not cheap) required to embrace a smarter future which seeks to bring renewable energy into the home, with those left out of the equation. Electricity provision has historically been a state monopoly. Yes there is progress when it comes to feed-in tariffs, but the ‘energy divide’ between South Africa’s rich and poor demonstrates how far we have to go before we can start referring to parity of treatment and equality in energy access.

All of this is occurring during a pivotal “Big Bang” moment for the energy sector, years in the making.

This month literally saw the signing into law by the President of an amendment to the Electricity Regulation Act, one which heralds a market reform of the country’s electricity regulations.

After decades of stagnation, Eskom is finally taking up a new role as a ‘national transmission company’, allowing Independent Power Producers (IPP) to compete with the behemoth in generation of electricity. Forgive me if I sound a little droll, a brave step, better late than never, but totally unacceptable when one realises our government is merely re-configuring a problematic state monopoly, with the resulting pyramid scheme involving the bulk sale of electricity by Metros and Munis to consumers and end-users still very much in place.

Demand Energy To The Home (ETTH)

Yes, us luckless consumer , those who actually pay for electricity instead of stealing it outright, are still being treated as an awkward afterthought by our fancy-pants President and his bloated cabinet.

We are thus issued with a100 day notice of an ‘impending change to our prepaid meters’ which will require new software via an Eskom circular, then a simple insert on SABC news. It appears Parliamentarians don’t use prepaid meters or worry about working in the dark. Zero announcement of tangible assistance to impoverished households, and nothing when it comes to upgrading our meters to a new, supposedly more secure system, with even less debate on the timing of the announcement.

Imagine what would have happened if the ANC had introduced a similar policy affecting mobile phones instead of embracing a big bang in 1994?

Remember that Nokia moment when literally everyone in South Africa had a Nokia cellphone?

What our President was really saying, “from next week, many ISPs will be able to provide the nation with Internet, but not one will be able to sell data directly to the consumer, fibre transmission will remain a monopoly.” Or “Folks, every small town and dorpie will be allowed to be in the Internet business” but “no actual business must operate with the intent to do business“, (apparently making money is a crime in South Africa?) as queues form outside the relevant government departments notorious for lack of service delivery?

Do you honestly think we would have smart phones if our government was the sole supplier of mobile telephony? Thirty years of socialist tinkering with the our economy has produced an entire generation without jobs.

This months Electricity Amendment announcement is really the dramatic equivalent to our Slick President announcing our country will be finally getting colour television, except the whole world has already moved on to HD screens, energy smart grids and streaming services.

Open Net Metering

If I still have your attention, (see my critique here and here) then consider open net metering. Currently our prepaid meters have no specification for connectivity, no external ports with which to interface these meters with a local area network (LAN), and no way of channeling data on the cost of these units from Pretoria, to our household consumption and home automation assistants.

Not only are we faced with a proverbial closed prepaid proprietary system whose data is controlled by the mandarins-in-charge (forgive the pun), but there is no clear path towards ‘time of use’ consumption, autobidding of energy, demand management, future options and a market trajectory which lowers the cost per watt, instead of creating energy inflation.

The global trend is towards concatenation or reduction of supply chains, towards placing a ‘factory on the desktop’, or a snappy logistics company at the factory gate, not the Presidents long-winded version of corporate capital, monopolistic bureaucracy crossed with a pyramid scheme and complicated multi-tier government.

Imagine being able to charge up your batteries when energy is cheaper, then using your storage when consumption is at a peak and expensive?

Where are the incentives from government for households to embrace a better future filled with electric vehicles charged by renewable and solar energy?

If you think this is a topic exclusively for the well-to-do? Think again, because collective housing schemes could also pave the way to collective energy generation at local level and potentially solve many of the problems encountered by the residents of Lavender Hill.

READ: Flogging a Dead Horse

by davidrobertlewis - September 22, 2022December 16, 2022

Flogging an Eskom dead horse? You’ve got it all wrong

SO LONG as this country myopically persists with it’s strange obsession in maintaining the Eskom energy monopoly, there will be load-shedding and blackouts. Consumers desperately require choices in energy provider, options on who can connect their home grid, to power the toaster and microwave oven. But practically nobody here is speaking out on the lack of consumer choice when it comes to electricity.

Its as if energy analysts are brainwashed morons flogging the proverbial dead horse, each year they call for inquiries into why the horse died, reclassifying the dead horse as ‘living impaired’, arrange for officials to visit other countries to ‘see how they ride dead horses’, call for additional funding and training to ‘improve the dead horse’s performance’, or the hiring of outside contractors to ‘ride the dead horse’, and so on, but are simply too afraid to ‘let go of the horse’, lest they be out of a job.

What is wrong with you people?

A decade ago I attended a talk by David Lipshitz, founder and CEO of MyPowerStation. A company which aims to provide a ‘virtual power station’ solution via online billing and provisioning of energy services to consumers. His magnificent idea of introducing information technology to the sale of electricity to the end-user and consumer, has been stymied by a regulatory environment which is more in keeping with a 19th Century model of distribution than the 21st century.

Lipshitz’s website is now merely a link to his book, The Last Blackout, available via Amazon.

“What would happen if city dwellers in cities with more than 1 million people suddenly had no electricity?” asks Lipshitz in an ‘electrifying, shocking, and powerful thriller’, that is too close for comfort. The past week has seen some areas of South Africa experiencing 9 hour blackouts. The weekend was a series of 6 hours of load-shedding for my own household.

South Africa’s model of energy distribution requires urgent and drastic intervention. And I don’t mean to re-engage the debate on where our electricity should be coming from in other words, how it is produced. Doing so merely adds to the pile of doggy-doo dolled up by consultants, analysts and self-proclaimed experts dished up on national television on a daily basis.

Whether or not, electricity is provided by the state, or Independent Power Producers (IPPs) is of no real consequence in a system in which the end-user is placed at the forefront. There are no rational reasons why consumers should not be given the choice of purchasing energy from sustainable resources, whether women-owned utilities, or listed companies with a high ESG and BEE component. Let the people decide.

Unfortunately, and despite the mooted plans to open Eskom’s grid to the ‘wheeling of energy’ by third parties, there remain a number of obstacles. The first is the fact that our government and especially its Marxist Energy Minister Gwede Mantashe, continues to embrace a blind focus on centralisation. You can read my piece on why the state is rooted in an ideological fixation, the problem of ‘Socialist Complexity’, and my proposal for an Energy Commons. I continue to believe a commons is a ‘way out of the debt trap’.

Eskom is heavily in debt and clearly unprofitable when it comes to the generation of electricity, and is a prime example of why governments and bureaucrats are less efficient than the market and free enterprise when it comes to allocation of capital. Which is why we continue to see the introduction of tariff increases several times over the inflation rate. Is more money really going to solve the problem?

Not when we have the bizarre situation in which our Muni’s and Metro’s, alongside the corner Cafe ‘prepaid token’ store, are all added to the game of profiting off the bulk sale of electricity, energy provided by a grossly inefficient pyramid scheme by a solitary, underperforming producer of electricity. Nobody is fooled by people like Cape Town mayor Geordin Hill-Lewis promising the City will bring new capacity online, give or take a megawatt, or our President Ramaphosa, racing home to declare yet another electricity crisis requiring a crisis committee.

Without actioning on our rights as consumers, rights enshrined in our constitution, we will be left in the dark. It is essential for Eskom to open up the grid, not only to the ‘wheeling of electricity’ but to the dealing and virtualisation of billing and provisioning of new services. Then we might take a cue from New Zealand where deregulation has proven incredibly successful.

The country has 5 major electricity generating companies. Genesis Energy, Mercury and Meridian Energy operate under a ‘mixed ownership model’ in which the government holds a majority stake, while Contact and Trustpower are private sector companies. The country once struggled with a system very similar to our own, before dumping a socialist government.

Sadly, despite promises, there appears to be no genuine enabling legislation nor incentives in South Africa to allow a third party to purchase electricity, from either the state or the IPPs, and to resell the result on the open, rather than captive market, to the consumer. This is clearly why our system is failing. Embracing Lipshitz’s modest proposal and learning from the example of New Zealand, would be a step in the right direction.

In fact one does not have far to travel, to examine the case of another state monopoly, to see why deregulation when it comes to South Africa is the only solution. The fate of Telkom, once the country’s sole cable monopoly, provides us with a good case in point. If we had not opened up, we would still have a situation in which the only telephone available, was from the same company, with a single color, beige. Left to its own devices (excuse the pun) Telkom would still be in the copper age.

Look at how Internet Services Providers (ISPs), just like IPPs began to emerge in the 90s, while our government to its credit allowed a semblance of competition (initially only in the mobile market). With the result these companies grew up and essentially outflanked Grandma Telkom. In the process provisioning fibre cable infrastructure to the suburbs, and FTTH, all of which cost the taxpayer not a single penny.

Given enough time, our IPPs might eventually begin rolling out similar infrastructure. In fact they would be negligent if they did not. Best to get Eskom into open competition mode as soon as possible. The alternative is living with a permanent threat of massive grid failure just around the corner, alongside a collapsed economy.

Published by Cape Argus 17 October 2022