Urgent action is needed to restructure South Africa’s electricity distribution industry, with infrastructure and maintenance backlogs recently breaking R30 billion and growing at a rate of R2.5 billion a year, Deputy Energy Minister Barbara Thompson told energy industry delegates at the 2011 Energy Indaba conference this week.
The conference coincides with the controversial closure of EDI Holdings, the company set up in 2003 by the South African government to address the issue of energy distribution.
The decision to transfer responsibility for restructuring South Africa’s electricity distribution system from EDI Holdings back to the Department of Energy was taken in December 2010, but has not been widely publicised. Accountability has been transferred with effect from 1 March this year, and EDI Holdings will be officially disbanded on 31 March.
“South Africa’s energy distribution system is deteriorating at a rapid rate and service delivery is becoming a major challenge for many of the municipalities in South Africa,” Dr. Willie de Beer, chief operations officer of EDI Holdings, told Business Excellence this week.
When EDI Holdings was set up, the South African electricity distribution industry was highly fragmented with electricity distribution being provided by 187 re-distributing municipalities (since reduced to 175). EDI Holdings was created to consolidate these into six regional electricity distributors (REDs).
“As at 15 February 2011 a total of 154 out of the 175 municipalities licensed to distribute electricity had signed the accession to the co-operative agreement,” said de Beer. “It is essential that the work done by EDI Holdings over the past seven years continues in the interest of the electricity distribution industry.”
