Thank you, Chair, and thanks for mentioning that I am making my maiden speech. I appreciate that. Hon Minister of Energy, hon members, ladies and gentlemen, we are confronted with the challenge of transforming the South African economy from being carbon-intensive and reliant on coal to being one of the most carbon-neutral economies in the world. This daunting task confronts our government today which has contributed to the energy crisis, as was discussed today, by doing too little, too late.
The unintended victims of our current energy crisis now appear to be the countless members of the public who will have to foot the bill on tariff increases of 25% a year over a period of three years. These tariff increases granted by the National Energy Regulator of SA in adjudication of the Eskom application translate into an effective increase of at least 35,8% for residential consumers who use more than 600 kilowatt hours per month - 35,8% is quite a lot.
On the apportionment of tariffs, the assertion can now be made that the cross-subsidy to the poor and to big industries is selectively burdening a narrow band of residential consumers. This narrow band of residential consumers includes our hard-working middle class - and they are black and white citizens of our country - and our hard-working state officials. Given the effects on the poor, the middle class and small business - and I think my colleague has alluded to the fact - the DA has asked Nersa for a revision of the tariffs.
I am glad to report that the hon Minister - and, I think, this was at Milnerton - indicated her concern with regard to the effect of the recent tariff increases, especially on the hard-working citizens of our country. Today we have spoken about the inclining block tariffs and the appeal to municipalities, and we hope these are measures that could help.
Chairperson, the DA discussed the criteria of affordability with Nersa and our concerns were raised that the public simply cannot afford these tariffs. The bottom line is - and I think that is reality - that you can only pay for what you can afford. Fortunately, we spoke in our portfolio committee about liquefied petroleum gas today, and we hope that that will bring some solutions.
We have to note that there is a perception among electricity consumers that Nersa simply does Eskom's bidding when tariff increases are levied. We appeal therefore today to Nersa to be rigorous and accountable so as to ensure that the adjudication of tariffs carries the expected weight.
Minister, Eskom also needs to shed more light on its special pricing agreements, the so-called SPAs. Nersa's response indicated they were fully privy to the information, but nowhere in the Eskom application to Nersa in regard to the tariff increases did we find any reference to the effect of the two Billiton Group contracts.
The effects of the two Billiton Group contracts are closely related to the tariff increases, given the percentage of electricity that they use, of course, and as indicated in the Media24 court application. But today we are still left in the dark as to the allegation that generation costs actually exceed the tariffs paid for electricity by the aluminium smelters. The question then comes to mind: Who is subsidising these costs?
The possible renegotiation of the Eskom-Billiton contracts could have a significant impact on the generating costs of Eskom. In this regard, we expect Eskom to keep a tight rein on their production costs by improving significantly in their management efficiency. We urge the new Department of Energy to encourage reasonable and affordable tariffs for the consumers of South Africa.
Then, briefly, on the issue of biofuels, we think that action needs to be taken to ensure that South Africa benefits along the full value chain of bio-energy supply and utilisation. The successful tapping of all possible energy carriers is vital for sustainable economic growth and development. Unfortunately, the Industrial Policy Action Plan on biofuels indicates that the debates have tended to focus on the food security versus the fuel security arguments, whilst the focus should be on utilising the full potential to create biofuels using the current maize crop surpluses of three to four million tons per year. We discussed this this morning at committee level. That is the excess crop that we have. Voorsitter, dit is die jaarlikse oorskotmielies wat verwerk kan word om die energiekrisis effektief aan te spreek, en ons het in die vooruitsig dat ons 'n vergadering met Graan Suid-Afrika sal h as hul gaste in Bothaville, in die omgewing waar ek woon. (Translation of Afrikaans paragraph follows.)
[Chairperson, the annual maize crop surpluses can be processed in order to provide a definite solution to the energy crisis. Soon we will be meeting with Grain South Africa as their guests in Bothavillem in the region where I live.]
The biofuel sector has the potential to create a substantial number of labour-intensive jobs in agriculture and to meet South Africa's renewable energy targets, and we all know that is 30% by 2013. It is encouraging that government has committed to a 2% blend target for biofuel's inclusion into the national fuel supply. Were South Africa to increase its blending target to 10%, some 125 000 direct jobs could be created. I appeal to the Department of Energy and the Portfolio Committee on Energy that the production of ethanol through maize be considered.
Hon Minister, on a positive note, I think it is 51 days to the Fifa 2010 World Cup, and I think my chairperson has alluded to the fact that everything seems to be intact and, rightly so, our streets and our cities are abuzz with excitement. We expect 500 000 visitors to our country. Five hundred thousand! The rush on peak time electricity and the anticipated winter seasonal peak demand should be noted. Eskom could need an extra 2 000 megawatts of electricity over the six-week period of the World Cup, and we have been quite concerned about the interruptible agreements that they have with big consumers. We did ask those questions as we went all over the country to visit our beautiful state-of-the-art stadiums.
Reports from Eskom indicate, however - this is the good news, and I agree with the chairperson - that it was considered highly unlikely that Eskom would have to enact load-shedding schedules, although I am a bit concerned about Johannesburg. I think there were three power failures: two last night and one today. Current load forecasts should safely allow Eskom a reserve margin of greater than 15% during the World Cup period. No scheduled maintenance is planned for the period by Eskom, and the electricity availability factor should be optimal.
Chairperson, I have to conclude. We have to apply our minds to South Africa's energy security. We have to apply our minds with regard to South Africa's renewable energy targets, and that is a very important one. We trust that the new Department of Energy will stand up to the huge challenge of making the Energy Department an effective and functional department. I thank you. [Applause.]