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Cablegate: Energy Planning and Cooperation, with the Lights Out

VZCZCXRO8886
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSA #4082/01 3331356
ZNR UUUUU ZZH
R 291356Z NOV 07
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 2833
INFO RUCPDC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0703
RUEHRL/AMEMBASSY BERLIN 0570
RUEHBY/AMEMBASSY CANBERRA 0583
RUEHLO/AMEMBASSY LONDON 1371
RUEHMO/AMEMBASSY MOSCOW 0706
RUEHOT/AMEMBASSY OTTAWA 0536
RUEHFR/AMEMBASSY PARIS 1229

UNCLAS SECTION 01 OF 02 PRETORIA 004082

SIPDIS

SIPDIS
SENSITVE

STATE PLEASE PASS USAID
STATE PLEASE PASS USGS
DEPT FOR AF/S, ISN, EEB/ESC AND CBA
DOE FOR T.SPERL, G.PERSON, A.BIENAWSKI, M.SCOTT, L.PARKER

E.O. 12958: N/A
TAGS: ENRG EPET SENV EINV SF
SUBJECT: Energy Planning and Cooperation, With the Lights Out

REF: A) Pretoria 3674

B) Pretoria 3507
C) State 54683

1. (SBU) SUMMARY: Department of Minerals and Energy (DME) Deputy
Director-General: Electricity and Nuclear Energy Nelisiwe Magubane
met DOE Director for African and Middle Eastern Affairs George
Person and Energy Officer on November 16 on the margins of the
Corporate Council on Africa Business Summit, flying to Cape Town
from Pretoria specifically for a meeting on bilateral energy
cooperation. Person advocated increased bilateral energy
cooperation in a range of areas. Magubane welcomed increased
cooperation and described energy planning and electricity shortages.
Magubane promised to identify dates for the planned meeting of a
new Joint Standing Committee on Nuclear Energy Cooperation (but this
bilateral did not otherwise cover nuclear issues - Ref A.) End
Summary.

-----------------------------
Next Steps on Energy Planning
-----------------------------

2. (SBU) Magubane described the process for national energy
planning, building from the September Energy Summit and
consultations with stake-holders (Ref B). She said the new White
Paper - Master Plan was under review and consultations with the
Provinces for six months. Then, it would be reviewed by cabinet for
about six months. Finally, the new white paper would be presented
to Parliament via the Portfolio Committee on Minerals and Energy.


3. (SBU) Magubane summarized the plan as targeting a change in
South Africa's energy mix from overwhelmingly coal to a mix of 60
percent coal, 10 percent gas, and 25 percent nuclear. She said the
SAG was striving to increase the role of demand side management,
renewable energy, and energy efficiency. Magubane pointed out that
the DME is tasked with energy policy and planning, while the
Ministry of Public Enterprises serves as state share-holder for
state electricity supplier Eskom.

-------------------------------------------
Electricity Woes - Wet Coal Excuse is Bogus
-------------------------------------------

4. (SBU) Magubane cited challenges for South Africa's grappling
with growth-driven electricity shortages, leading Eskom to forecast
5-8 years of load-shedding until it brings on new supply. She
expressed frustration with Eskom's seeming ineptitude in handling
recent problems. She surmised that there was miscommunication
between management and technical personnel, citing the absurd claim
that "wet coal" had been a cause of recent power outages. Magubane
said the outages were due to a combination of demand growth, supply
chain delays in new plants, planned maintenance, and unforeseen
plant problems.

5. (SBU) Magubane recognized that electricity is priced too cheaply
(1-2 U.S. cents per kilowatt-hour), hampering the SAG's ability to
put in place demand-side management, incentives, and smart metering
systems. She pointed out that Eskom's new build and new private
Independent Power Producers (like AES, in the running as "preferred
bidder") would benefit from higher priced take-or-pay contracts.
She said the SAG should look at fuel switching, cogeneration, and
QShe said the SAG should look at fuel switching, cogeneration, and
developing a gas market.

------------------------------
Areas of Potential Cooperation
------------------------------

6. (SBU) Magubane thanked Person for the effort that went into
making the visit of her delegation to Washington D.C. last April a
success. She and Person identified skills development, energy
efficiency, renewable energy, and energy planning/modeling as areas
of potential cooperation (without delving into nuclear energy
cooperation).

7. (SBU) Magubane promised Energy Officer that she would consult
with the SAG to identify dates for the launch of the Joint Standing

PRETORIA 00004082 002 OF 002


Committee on Nuclear Energy Cooperation (JSCNEC), as agreed during
the April visit and reaffirmed recently (Refs A and C). Embassy
followed up with a request for this information by diplomatic note.

BOST

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