SAFTU DISAPPOINTED THAT NCOP APPROVED THE ELECTRICITY REGULATION AMENDMENT BILL

Source: Simisa Bearbeitung (Auschnitt, Farben): Pechristener via Wikimedia/ GroundUp

The South African Federation of Trade Unions (SAFTU) is displeased that the National Council of Provinces (NCOP) has approved the Electricity Amendment Regulation (ERA) Bill. This is a win for the private sector and deals a great blow to public ownership and production for social need, not for profit.

SAFTU made a parliamentary submission to oppose this bill, which will dismantle Eskom’s monopoly in energy generation, liberalise the electricity generation market, and hasten the privatisation of electricity generation.

The Bill establishes a framework for the creation of the transmission company and the market for energy generators. This transmission company, which has already been registered, is aimed at furthering the objectives of privatising energy provision in this country. This law is not introducing anything new. It is merely codifying into law the political economy of market liberalism which was first implemented with the procurement of power from the Independent Power Producers (IPPs) in Bid Window 1 in 2011.

The Bill provides a legal framework for the proliferation of Independent Power Producers (IPPs), which will, in line with the plans to unbundle and dismantle Eskom, produce 66% of South Africa’s electricity by 2035 (according to Eskom’s projection presented to the Presidential Climate Commission). They have planned to decommission Eskom’s coal fleet without investing heavily in its renewable capacity. The idea is to replace Eskom’s dominance by having IPPs dominate the production of electricity through renewables.

To incentivise the private producers to invest in generation, the electricity tariff structure will guarantee the private investors a risk of return i.e. profits. Higher tariffs to guarantee profits to the private producers will come at a high social cost, where ordinary working people will not afford electricity.

SAFTU rejects the ERA Bill as nothing but the codification of market liberalism into law that will subject the energy needs of our society to profit motives.

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