Launch of the African Utility Conference

In particular, we have come to realise just how important a sustainable and efficient energy supply is for investment, growth and development in our City.

But we must not make the mistake of thinking that the problem is limited to a bolt in Koeberg.

Our economy has seen a period of sustained growth, which has brought with it a demand for resources, especially energy.

And we, like the rest of the world, are also well aware of the negative impact that this growth in energy demand is having on the environment, especially when it comes to fossil fuels.

There is, then, a need to focus on the long term power needs of Cape Town. I believe that if we do this, we will not only improve the economic future of this great city, but also set an important example as one of the continent's and indeed the world's leaders in renewable energy.

That is why the electricity Recovery Plan, which has been put together by all sectors in our City, has a very important message built in to it. The message is one which we hope will be remembered long after this winter passes, and that is: we must alter our lifestyles and change our attitudes toward energy and how we use it. We must become energy efficient. Not only in how we cook and heat our homes and light and power our factories, but also in how we transport our workforce and how we generate and dispose of our waste.

To this end, the City has developed a Draft Energy and Climate Change Strategy. This Strategy sets a number of tough targets to set up a variety of energy sources that fall outside of the usual staple of coal fired power stations. Targets for renewable energy form an important part of this document. Our target is for 10% of the City's total energy to come from renewable energy sources by 2020. This is a real challenge as currently energy from renewables is more expensive than energy from coal fired electricity. But this additional cost is small, very small as our City has seen, compared to the cost of energy not supplied. The Cape Chamber has estimated that the cost to business alone of the two weeks of outages that the City saw in February is between R500m and R1.2b. This does not include the cost of lost wages and increased costs to households. It is thus imperative that all of us, and not only the people of Cape Town, must take up this challenge.

In responding to the challenge, government must and is going to take the lead. The multi-party Mayoral committee will be recommending to Council at the end of May that the City enters into a Power Purchase Agreement with the Darling Wind Farm. This will pave the way for the first commercial wind farm in South Africa. The green energy produced from this important pilot, which is supported by the Department of Minerals and Energy and the Danish government, will be marketed through another City first, RED1.

The question of where we get our energy from is probably the most talked about side of energy matters, both locally and globally. However, in Cape Town we have another very specific problem to deal with. That is the deteriorating state of electricity distribution infrastructure and particularly municipal owned infrastructure. The initial reports from the National Electricity Regulator's sustainability audits, which have been carried out in a number of the larger distributors, point to dangerous levels of under-investment and lack of repairs and maintenance. Although the audit report on the City's network has not yet been released, the impact of the reduced investment over the last number of years is likely to be highlighted. We can not allow this to undermine the growth of our economy, especially since it is precisely this growth that is needed in order to address huge social imbalances within the city.

The establishment of RED1 in July last year was aimed at meeting both the challenges of managing energy growth and infrastructure requirements. RED1, as we all know, is the first Regional Electricity Distributor established by the City in July last year as part of the national restructuring of the electricity distribution industry. We hope the independent non-executive board of RED1 will be able to operate with a new level of efficiency to resolve Cape Town's pressing energy needs. They will have to, because the City, as the service authority, demands this.

The challenge however is to all of us, government, business labour and civil society. This conference is an opportunity for us to conceive and develop innovative programmes that will bring lasting changes to the way in which people use energy.

I thank you.

Further information:
Robert Macdonald: 072 638 7710