1. Transformation of distribution
LIZ MCDAID
GREEN CONNECTION
SAFCEI
Earthlife Africa Johburg

2. Aims of electricity system:
Universal access to electricity
Sustainable supply to low income at affordable prices
Reliable, clean, financially viable electricity system to support economic development

3. Planning for an intelligent future
Generation
Transmission
Distribution
End user
Generation
Transmission
Distribution
End user
Generation

4. Poverty Context
At least 10% of South Africans live in 2700 urban settlements. (more than 1.2 million households. Proportion of households living in information settlements increased 21% to 22% in metros, despite increase of house –building.
(SACN 2011).
40% population earn less than R1000 per month
Low income spending 12-20% on energy where high income will spend 6% (SECCP)
Eg – equivalent of R4000 out of R income spend on energy
Access does not equal use
mixed fuel use :
Electricity – lighting
Paraffin – cooking
“Quality of connections keeps people in poverty”
2 million disconnections – cant find a reference
4 million do not cook with electricity
2 million use candles
Women and girls can spend 6 hours on fuelwood gathering and cooking
50kWh not sufficient

5. Cost of electricity system
Rising tariffs due to generation choices mean increasing hardship, increasing disconnections for low income households.
Increasing tariffs could mean increasing own generation for industry, reduced customer base.
Implies less revenue to maintain distribution network

6. Child support grant/ mnth Petrol price
HH elec rural Rc/kWh
HH elec urban Rc/kWh
Social grant/ mnth
Child support grant/ mnth
Petrol price
2003
R0.92
0.407
R700
R160
R3.81
2009
R1.14
0.54
R1010
R240
R7.82
% change
23%
32.4%
44%
50%
105%
(2010) –

7. Logical spending?
$$$
Eskom
consumers
Treasury
$$$
$$$
DPE

8. Need for integrated approach
Benefits of electricity provision impact on other departments:
Reduced air pollution – improved respiratory health
Improved lighting leads to improved school results – positive impact on education
Support small business – improves economic development and reduces burden of social grants

9. intelligent finance
Halt current model of pre-paid meters that limit tariff differentiation
Ensure pro-active procurement of appropriate distribution technology – for 21st century
Combine energy efficiency and modular approach and ensure differentiated revenue stream and cross subsidise
City of Cape Town – strong renewable energy implies 7c/kWh increase but include efficiency and the price increase is only 0.2c/kWh (SEA, 2012)

10. Distribution Transformation
Distribution infrastructure:
Mini-grids
“smart” technology (net-metering, etc)
Flexible, small scale units – modular approach
Embedded generation
Capital expenditure - Treasury to drive funding backlog infrastructure
Operational expenditure – cost recovery with standard network charge
FBE increased – 100kWh

11. Case studies Name description Costs incl. distribution/ kWh capex
NuRa solar homes (SA)
Solar system plus gas
R12.56
Donor
Gobabeb (Namibia)
Solar, wind, diesel
R1.68
Katana (Tanzania)
Biomass
R1.44
Commercial
Nollie-se Kloof tourism (SA)
Solar, micro-hydro, wind
Poultry farm (SA)
Biogas
R 0.40
Eskom rural
Coal grid
R 1.14
Anecdotal – urban network charge R9 per day!!
Green Connection –

12. Governance challenges
Issue
Way forward
Financial accountability
Failure to spend
NERSA to use licence claw back
Institutional capacity
Lack of skills
Education, private sector
Transparency/
Availability of data
Central information base – NERSA/statsSA
Coordination
Silo based
Stakeholder task team
Evaluation/Enforcement
Growing backlog
Parliament oversight of task team
Information – use internet based system of reporting – bolster nersa.

13. Recommendations
Treasury to drive funding capex backlog – expand existing programmes
Use MYPD for operating costs – ensure cross-sub-subsidisation system to ensure Fbe and cost recovery from wealthy
Standard wheeling charge (not to discourage embedded generation but important to identify hidden generators )
Integration/communication re ISMO and distribution to reduce risks
Legislation amendments – license to be revoked if not compliant
Data collection centrally managed and used for planning
Align reporting and budgeting and planning timelines of government silos
partnerships to support smaller munics.
Specific skill development plan – retraining of retrenched technical staff, bursaries, partnerships with private sector
Timeframe – ensure EDI budgeted for in 2013 – parliament to oversee
Inter-govermental task team supported but include non-govt. stakeholders – key objectives:
to ensure current capex allocation spent.
To ensure skills development plan