Ensuring Universal Service May 15, 2012
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Transcript of Ensuring Universal Service May 15, 2012
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Ensuring Universal Service
May 15, 2012
Phindile Nzimande, CEO,National Energy Regulatory of South Africa
STRIKING A BALANCEIN THE MIDST OF CHANGE
May 13-16, 2012Québec City, Québec (Canada)
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Discussion Outline
1. Energy poverty
• The concept of energy poverty2. Energy poverty in the South African market context3. Interventions to tackle energy poverty4. Role of Regulators in ensuring access to energy:-
• Meeting the energy needs of remote customers• Sharing costs of universal access service• Challenges faced by Regulators in dealing with energy
poverty in developing markets
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Energy Poverty: Electricity Consumption in Africa
Electricity consumption per capita in Africa is still very low compared to that of Western economies
But this map shows that even within Africa, there are stark differences in levels of access to electricity between South Africa and the rest of sub-Saharan Africa.
South Africa, electricity access at > 80%, while in some sub-Saharan Africa countries less than 20% of population has access to electricity
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Energy poverty Concept
• Energy poverty refers to when a population does not
have access to regular, modern, clean and
affordable energy fuel supplies
• In the South African case, our population’s access to
electricity (the electrification rate) would be the best
indicator of our country’s energy poverty status
• Because, electricity is the most predominant energy
fuel used in South Africa
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Addressing Energy poverty in South Africa
• Electrification programme is a government of South Africa’s policy
agenda – resulting from the White Paper on Energy Policy (1998)
• Electrification rate has increased from 30% in 1994 to about 80% in
2011 (5.4 million households connected) –Map on the next slide
shows electrification intensification
• Under universal access objective - 92% access to electricity by
2014/15 for all formal households
• Off Grid supplies:- 18 projects supply 28 845 households of which
19 320 get Free Basic Electricity (FBE)
• Free Basic Alternative Energy is supplied to 52 653 households
• Government budget allocation of US$375Million annually
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Addressing Energy poverty in South Africa
Baseline: Access in 1996 (country was red to green)
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Addressing Energy poverty in South Africa
National Progress: Access in 2010 (only pockets of red left, country becoming more blue)
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Interventions to tackle energy poverty
Policy • The White Paper on Energy Policy (1998) underpins
increasing access to affordable energy services“Government commits itself to implementing reasonable legislative and other
measures, within its available resources, to progressively realise universal
household access to electricity.”Regulation• Inclining Block Tariffs• Allowance of transparent cross subsidies
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Interventions to tackle energy povertyImplementation • Establishment of National Electrification Fund • Establishment of entity to drive electrificationEducation• Education on conservation & improve efficiency of
biomass fuel cook-stoves Non-grid electrification programmes • promise arising from renewable energy sourcesAffordability • lifeline tariffs, free basic electricity and inclining block
tariffs
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Challenges faced by regulators in dealing with energy poverty
• Infant regulatory framework/policy about-turns?
• Lead time for the economy to transition from current
prices to cost-reflective prices – potential public/political
backlash
• Affordability – setting prices that maintains sustainable
cross-subsidies
• Enforcement powers and capacity of judiciary to allow
reviews/appeals of regulator decisions10
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Conclusion
• Addressing energy poverty requires a variety of
measures and sustained investments
• Regulators have a role to play – engender regulatory
certainty to attract investments, transparency,
predictability, pricing and advising policy makers
• Renewable energy – an opportunity to increase access
to clean energy for all via off-grid/mini grids generation
• Pro-poor tariff still required to deal with energy fuel
affordability
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Thank you
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