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dam-l Power distrib. in SA distorted/LS
>Power to the powerful:
>Ideology of apartheid energy still distorts electricity sector
>
>by Patrick Bond
>
>South Africa's surreal energy problems reflect the kinds
>of contradictions you would expect during a transition
>from apartheid economic history to a contemporary
>electricity pricing system all too often based on
>(`neoliberal') market-policy for households, complicated
>by massive subsidies for big corporations, in one of the
>world's most unequal societies.
> There are at least three world-class development
>disasters here: our economy's skewed over-reliance on
>(and oversupply of) pollution-causing, coal-generated
>electricity; the lack of equitable access amongst
>households along class/race lines (with serious adverse
>gender implications); and periodic township rioting
>associated with power cuts resulting from nonpayment.
> Plenty of other challenges for a revitalised energy
>policy could be mentioned. But assuming Minister
>Phumzile Mlambo-Ngcuka wants justice to be done during
>the ANC's second term (and is less distracted by shady
>Liberian consultants or groundless attacks on the
>auditor general than her predecessor), merely addressing
>electricity distribution would require a serious
>challenge to corporate power and neoliberal ideology.
>Instead of praising the filthy rich (who can forget?),
>the minister would have to subsidise filthy impoverished
>townships currently suffocating under winter coal fumes.
> An outstanding recent book, The Political Economy of
>South Africa by Ben Fine and Zav Rustomjee, puts this
>sector into economic perspective. Here we locate
>electricity at the heart of the economy's `Minerals-
>Energy Complex,' a `system of accumulation' unique to
>this country. Mining, petro-chemicals, metals and
>related activities which historically accounted for
>around a quarter of economic activity typically consumed
>40 percent of all electricity.
> Thus Eskom was centrally responsible for South
>Africa's economic growth, but, Fine and Rustomjee show,
>at the same time fostered a debilitating dependence on
>the (declining) mining industry. Economists refer to
>this as a `Dutch disease,' in memory of the damage done
>to Holland's economic balance by its cheap North Sea oil.
> South African electricity consumption (per capita)
>soared to a level similar to Britain, even though black-
>-`African'--South Africans were denied domestic
>electricity for decades. To accomplish this feat, Eskom
>had to generate emissions of greenhouse gasses twice as
>high per capita as the rest of the world, alongside
>enormous surface water pollution, bucketing acid rain
>and dreadfully low safety/health standards for coal miners.
> To what end? Today, most low-income South Africans
>still rely for a large part of their lighting, cooking
>and heating energy needs upon paraffin (with its burn-
>related health risks), coal (with high levels of
>domestic and township-wide air pollution) and wood (with
>dire consequences for deforestation). Women,
>traditionally responsible for managing the home, are
>more affected by the high cost of electricity and spend
>far more time and energy searching for alternative energy.
> Ecologically-sensitive energy sources--such as
>solar, wind and tidal--have barely begun to be explored,
>while the few hydropower plants (especially in
>neighbouring Mozambique) are based on controversial
>large dams that, experts argue, do more harm than
>developmental good.
> Some inherited electricity dilemmas stem from a
>racist, irrational and socially-unjust history.
>Conventional wisdom even before 1948, we must never
>forget, was that `temporary sojourners' were in cities
>merely to work; they would not consume much--certainly
>not household appliances--since their wages were
>pitiably low. As Jubilee 2000 South Africa observes with
>justifiable bitterness, more than half of the World
>Bank's $200+ million in apartheid credits from 1951-66
>were for Eskom's expansion, including coal-powered
>stations. But none of the benefits found their way to
>the homes of the majority of citizens. Even by 1994,
>fewer than four in ten African households had
>electricity.
> Meanwhile, corporate South Africa suffered the
>opposite problem--an embarrassment of energy riches--
>especially when terribly poor planning at Eskom two
>decades ago led to massive overcapacity (which at peak
>in the early 1990s allowed for more than 30% more
>generation than demanded). The late-apartheid solution,
>inherited and amplified today, was to give the
>corporates ever-cheaper power and penalise the poor with
>extremely expensive prepaid meter systems (which are
>never installed, note angry community activists, in
>bourgeois, formerly white areas).
> The meagre electricity consumed by low-income
>households (less than 3 percent of the total) costs them
>at least four times more per kiloWatt hour than paid by
>well-connected corporates. Was it a coincidence, one
>might reasonably enquire, that Eskom's finance officer
>revolved out the door to head a major division of
>Gencor-Billiton, and then won the same cheap pricing
>deal for the ill-fated Coega zinc smelter that he'd
>earlier given Alusaf? (Meanwhile, thousands of nearby
>Port Elizabeth township households had their power cut
>since 1997, due to poverty.)
> Defenders of the big corporates argued they help mop
>up the excess capacity and do so at off-peak hours, and
>that the poor create larger administrative costs per
>unit. As a result, policy avoided the kinds of `cross-
>subsidies'--by which big users pay more per unit than
>those consuming a bare minimum--that the RDP called for,
>and that are finally being installed in some large urban
>water distributions. (Even a kiloWatt hour free per day
>as a `lifeline' to all consumers could have a dramatic
>effect on consumption for those who need it, while
>higher prices would potentially teach big users to
>conserve.)
> Instead, government policy has imposed `cost-
>reflective tariffs,' as a 1995 document insisted. The
>1998 White Paper is an improvement on previous versions,
>but it too makes the counterproductive argument that
>`Cross-subsidies should have minimal impact on the price
>of electricity to consumers in the productive sectors of
>the economy.'
> Worse, the Department of Provincial and Local
>Government's Municipal Infrastructure Investment
>Framework supports only the installation of 5-8 Amp
>connections for households with less than R800 per month
>income, which does not offer enough power to turn on a
>hotplate or a single-element heater. (Thanks to social
>movement advocacy, this is at least better than the
>original policy, drafted largely by the World Bank in
>1994-95, which had offered low-income households no
>electricity hookup.)
> The 1995 energy policy also argued that `Fuelwood is
>likely to remain the primary source of energy in the
>rural areas.' As if on cue, Eskom began to wind down its
>rural electrification programme and does not envisage
>electrifying the nation's far-flung schools.
>Notwithstanding Eskom's commercialisation fetish, its
>economists had badly miscalculated rural affordability.
>Paying as much as R0,48 per hour (compared to a
>corporate average of R0,06 and bigger discounts for the
>Alusaf), rural women use up their pre-paid metre cards
>within a week and can't afford to buy another until the
>next pension payout.
> But in pricing power out of reach of the poor, the
>well-paid economists from Eskom, the World Bank and
>government refused to incorporate `multiplier effects'
>that would benefit broader society, were people granted
>a small free lifeline electricity supply: better public
>health, a cleaner environment, more SMMEs,
>infrastructure construction jobs and more equal
>relations between men and women.
> If Mlambo-Ngcuka cares about such `public goods' as
>much as `getting the prices right' (for privatisation?),
>she now has a chance to transform neoliberal electricity
>policy, muffling that suspicious echo of apartheid-era power.
>
>***
>
>Wits political-economist Patrick Bond's book, Cities of
>Gold, Townships of Coal: South Africa's New Urban
>Crisis, is being published this year by Africa World
>Press.
>
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Lori Pottinger, Director, Southern Africa Program,
and Editor, World Rivers Review
International Rivers Network
1847 Berkeley Way, Berkeley, California 94703, USA
Tel. (510) 848 1155 Fax (510) 848 1008
http://www.irn.org
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