DMRE must account for delays to energy reform

August 21, 2023 Siyabonga Mtangana

The author, Business Leadership South Africa CEO Busi Mavuso

Delays in processing the Electricity Regulation Amendment Bill, which came to light last week, are appalling. Due to apparent administrative bungling, the bill has not been properly tabled at parliament by the department of mineral resources & energy, so it has not started the process through committees to become law. The bill was approved by cabinet in March, and the delays are inexplicable and unacceptable.

The bill is an urgent piece of legislation that is central to the joint efforts of business and government to solve the electricity crisis. It will allow for the creation of a Transmission System Operator to manage the national grid and procure electricity from a competitive market. It is key to attracting the investment needed to expand the capacity of the grid. It will create a level playing field for all generators of electricity, both private and public. This is the fastest way to get new electricity onto the grid at the lowest cost.

There are now considerable risks that the bill will not be made law before the end of the year, and even possibly before elections next year. While a new bill was properly tabled last week as soon as the problems come to light, it was improperly submitted in April. Had it been done correctly, we would be much further down the road to solving the electricity crisis.

The mineral resources & energy committee in parliament already has a full agenda, making it difficult to process the bill through required public consultations in time for the year-end break. While the DMRE did not submit the bill properly, it is also inexplicable why parliament did not raise the alarm earlier. It leaves me feeling like neither are taking the electricity crisis seriously enough. It suggests that there are silos within government, and they are not united in delivering the resolution to the electricity crisis that the country desperately needs.

The situation is highly frustrating for organised business, which has been working hard with government to resolve the crisis. We have raised considerable funding through the Resource Mobilisation Fund and many of our members have put hours of senior executive time into working with government on solutions.

Of course, there are many in government that will be just as frustrated and disappointed as I am at the delays, including those in Necom. But for business to continue to invest its energy into partnering with government to resolve the crisis, we need confidence that such bungles will not happen. We need to see the institution of government holding people accountable when agreed actions are not taken, just as we would see in business.

Central priority

The Necom process has been positive in putting together the best plan possible to resolve it. We are fully behind it. But plans are nothing without implementation, and implementation has long been a challenge.

The Operation Vulindlela team in the presidency and national treasury has been a major catalyst for getting implementation done and has worked hard on driving the necessary legislation forward. But after last week, there are many in business who are concerned we are being taken advantage of. Business cannot expend its efforts and resources with no prospect of positive outcomes for the business environment. It makes it difficult to sustain the support of business.

Electricity is a central priority in the new partnership between business and government through Business for South Africa. This new partnership includes a pledge by more than 120 CEOs to support government to resolve the most pressing challenges holding back our economy, including logistics and crime. This new partnership has revived momentum on both sides of the table to address these issues, but we need to sustain it.

capacity hogging Business and government can achieve a great deal together, though of course we cannot expect everything to work smoothly in doing so. There will be hiccups and frustrations when things don’t work to plan. Dealing with those has to be part of the partnership – we must jointly act to course correct when something goes wrong. The frustration over the ERA Bill misstep is in large part because it is so unnecessary. It is purely a bureaucratic bungle, not one born from the complexity of achieving policy reform. But it has revealed that certain parts of government are just not serious in delivering the change we need. Our partnership has to include mechanisms to course-correct in the face of such bungles. I hope that we can urgently find a route to do so.