Energy security and low carbon economies
Globally, there are 1.3 billion people who do not have access to electricity. Nearly half this number resides in sub-Saharan Africa. In South Africa, approximately 85% of the population uses electricity for lighting and about 75% use it for cooking as well. Access to energy and electricity is crucial for alleviation of poverty.
South Africa’s state utility, Eskom, provides 95% of the country’s electricity. Its electrification programme has improved electricity access since 1994, when more than 60% of the population lacked access. The programme was made possible by the low cost of electricity, which was also the basis for the universal access and provision of Free Basic Electricity Policy of 2003 (50 kW/month) for poor households connected to the national grid.
Electricity prices in South Africa increased by 78% between 2008 and 2011 and will continue to rise in real terms for several more years. This has significant impacts on affordability and continued access to electricity for many households. It also places significant pressure on businesses, particularly those that are energy intensive, as many are in a developing country.
In addition to the rising cost of electricity, supply has been struggling to meet increasing demand. During 2013, Eskom has operated with a reserve margin as low as 1%, despite a drop in electricity demand, due to the declining performance of an aging fleet of coal-fired power plants. Preventive maintenance at these power plants has been delayed, while there have also been delays in construction of two new 4800 MW coal-fired power plants. After rolling blackouts in 2007/2008, three previously mothballed power plants were recommissioned and an energy efficiency drive was initiated. These, coupled with the economic downturn, resulted in temporary relief of pressure on the grid. However, electricity constraints have resulted in slower economic development.
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