Eskom 2.0 – Setting Us Up for (Yet) Another Fall
What’s the one thing a country that has already run pretty much every state-owned enterprise (SOE) into the ground need?
Another state-owned enterprise!
The tragic thing is, it’s not even a trick question.
It is, however, a joke.
Albeit not in the least bit funny.
Somehow, the Powers That Be have decided the best way to deal with the sheer catastrophe that is Eskom is to launch another Eskom.
I wish I was lying. I really do.
There is a definite irony to the fact that as I write this, we are but moments away from another round of Stage 4 loadshedding.
But hey, clearly we know how to run an electricity company, so let’s run another one just for kicks.
Or should I say, kickbacks?
Because this really has nothing to do with electricity, but everything to do with power.
The people in charge are truly the only ones who think creating another state-owned electricity company to “help out” the existing state-owned electricity company is a good idea.
Everyone else has reacted with various shades of open-mouthed WTF:
“President Cyril Ramaphosa’s announcement that he intends to create another state-owned enterprise to deal with South Africa’s energy crisis is patently ludicrous. The ANC has mismanaged Eskom into the ground and this proposal demonstrates that they will continue to exacerbate the energy crisis. The solution is not another Eskom. The solution is to vote for a new government.”
Action SA.
“If one can’t run Eskom, or Transnet, or SAA, or Denel, or any of the other state-owned enterprises, I really think that starting another new state-owned enterprise is certainly not going to be a solution.”
Energy expert, Chris Yelland
The DA’s shadow minister of public enterprises, Ghaleb Cachalia, told BizNews he thinks the suggestion is “preposterous.”
In a letter to the Sowetan, outraged South African Peter Bachtis wrote:
“Government-controlled Eskom 2.0 is a massive scam to create opportunities for the ANC inner cabal and their immediate families and chommies. Patrice Motsepe, Ramaphosa’s brother-in-law, is waiting in the wings to invest, and ultimately derive huge financial gains from Eskom 2.0. It’s another murky, self-serving national project which will benefit a few from the inner circle. Let us not allow ourselves to once again be screwed by a political party that is both immoral and self-serving.”
Energy expert Professor Sampson Mamphweli from the Centre for Renewable and Sustainable Energy Studies at Stellenbosch University, commented, “There’s no need for another state-owned enterprise in the energy generation, transmission and distribution landscape.”
I could go on – there is certainly no shortage of people voicing their incredulity at Energy Minister Gwede Mantashe’s recent suggestion.
One of the most worrying things is that, in her attempt to justify the validity of the proposal, ANC economic transformation chair, Mmamoloko Kubayi, said that building a second state-owned power utility would go a long way to ease discomfort within the ANC around Eskom and the apparent concessions to private companies encroaching on the energy sector.
“A majority of ANC members feel that we are almost giving away state power to the private sector, so there will be discomfort,” she said.
Please allow me a moment to pick my jaw up off the floor.
Although to be honest, I don’t know why I’m surprised. And it serves to support my original assertion that Eskom 2.0 is less about solving South Africa’s electricity crisis and helping our crippled businesses, and more about hanging on to power (pun absolutely intended).
And it gets worse.
When asked about funding for this new entity, Kubayi went on to say, “The state has many SOEs, some of which are not a priority. Funding could be diverted from these.”
You honestly cannot make this sh*t up.
Which “low priority” SOEs do we think Kubayi is referring to? SAA, perhaps? The Post Office? And while we’re pondering, why stop with SOEs? Why not look at diverting funds from other evidently low priority areas of government responsibility like education and healthcare?
Sadly, it doesn’t stop there. Just like our favourite radio station, the hits just keep on coming.
A new report by economics and energy advisory specialists Meridian Economics, claims that South Africa could have experienced 96.5% less load shedding in 2021 if the Renewable Energy Independent Power Producer Program (REIPPP) hadn’t stalled in 2016.
Not so co-incidentally, Johannesburg-based African Rainbow Energy and Power is now looking to get South Africa’s renewable energy plans up and running once again, hoping to make itself one of the largest providers of renewable energy on the African continent.
Some people have raised questions (and eyebrows) at this, pointing fingers at South African billionaire Patrice Motsepe, the CEO of African Rainbow Energy and Power, because of his familial connections to both President Cyril Ramaphosa and Minister of Energy, Jeff Radebe.
The reason for the finger pointing is the current allegations levelled against Motsepe in connection with a certain cattle purchase at a certain auction. But perhaps that is a story for another day.
So, now I’d like to ask you a question:
Who reading this is familiar with this statement: “Eskom would like to remind the public that load shedding is implemented only as a last resort to protect the national grid. We, therefore, urge all South Africans to continue using electricity sparingly, especially during these uncertain times on the power system?”
I’m sure we all are.
So, in an effort to comply, and use electricity sparingly, many South Africans have opted to supplement their grid supply with solar power. You would think Eskom would be grateful. Not so.
Instead, through its most recent tariff application to the National Energy Regulator of South Africa (NERSA), it has requested that on-grid solar users pay an additional R938 per month.
Almost R1 000 a month penalty for reducing pressure on a grid that is, quite frankly, circling the proverbial drain.
Surely then, this flies in the face of every claim the government has ever made about opening the grid to independent power producers?
At the end of the day, however incredulous we are at the whole Eskom 2.0 debacle, there is no denying something has to be done about South Africa’s electricity problem. And fast.
So, if we can’t stomach the idea of Eskom 2.0, what are some of the alternatives?
Rooftop solar is definitely a step in the right direction. But instead of implementing an outrageous tariff on users, the government should be incentivising the installation of solar panels.
We should be looking at countries like Vietnam, which also used to rely heavily on coal-powered electricity generation. Now, it has over 100 000 rooftop solar installations on factories, offices and private homes.
And by the way, Vietnam has a per capita GDP per capita far lower than South Africa, but the solar power initiative was up and running, and generating nine gigawatts of additional power, in just one year.
Remember back in 2019, the department of public enterprises published a plan to unbundle Eskom into generation, transmission and distribution to ensure that the various companies can be run efficiently, independent of each other?
Greenpeace Africa’s Nhlanhla Sibisi says our government should stick to this plan, but shouldn’t wait for the unbundling process to start. Instead, they should start now with IPPs.
“They should give IPPs opportunities to produce renewables. IPPs have the capacity and the will to fund renewables. The processes can be done in parallel,” he says.
Professor Mamphweli agrees, but adds there are other steps the government could take to help alleviate the current situation – at least in the short term. And that would be a start.
One of these steps is battery storage.
“The government needs to run models looking at the impact of having additional battery storage on the grid,” he advised.
“Load shedding costs the economy billions. We need to look at the costs of adding something like 3 000MW to 5 000MW battery storage facility versus the cost of load shedding.”
So how would that work?
Additional energy that usually is available during the day from solar energy production is often curtailed because there’s not much demand for it. Instead of curtailing that energy, the battery storage facilities would take it and store it to use for when the system is under strain.
Mamphweli also believes clear regulations need to be set up to allow people to use the grid itself to store energy, not just draw energy.
“During the day, household systems would pump back unused energy into the grid. When they need the energy at peak hours, they just draw back on the energy that they fed into the systems,” he said.
Battery packs are usually the most expensive components of solar backup systems, with the cost for an average household in the region of R30 000.
But if we could use the grid as storage, there would be no need for battery systems.
Instead of subsidising the fossil-fuel industry, the government should move towards subsidising households when they install solar systems. This would speed up the uptake of “mini-grids.”
We would do well to listen more to experts such as Professor Mamphweli and Nhlanhla Sibisi and less to the people who’ve been charged with solving our energy crisis for the best part of a decade but have continually failed to do so.
Let’s not forget that, for nine years as Deputy President, Mr Ramaphosa was entrusted with “fixing Eskom” but didn’t. And you know what they say – if you’re not part of the solution, you’re part of the problem.