Another Eskom disaster waiting to happen

Opposition party Democratic Alliance (DA) says that the African National Congress’s (ANC) plan to shift Eskom away from the Department of Public Enterprises to the Department of Mineral Resources and Energy (DMRE) is ‘irrational and disastrous’.

The party said that it shares the opinion of Professor Anton Eberhard that it would be a grave mistake to move Eskom to the DMRE or even a separate energy ministry.

Eberhard is the director of Power Future Lab, focusing on infrastructure sector investment, management, reform and regulation in Africa.

According to Eberhard, there is an obvious conflict of interest in an energy ministry being Eskom’s shareholder while also having responsibility for competition and regulation in the sector.

“There is a clear and present danger that if this happens, Eskom will never be fully unbundled – as is necessary. Moreover, it will retain its dominant market position, and the envisaged open power exchange and the market will not, in all probability, be implemented,” said the DA.

“Private investment will be pushed to the back burner and under an enhanced version of the status quo – back to the future, as it were – corruption and load-shedding will flourish again.”

“The move also has potentially significant financial implications, which we are busy unravelling.”

On January 9th, President Cyril Ramaphosa said that the energy department would take over the mandate of overseeing the national power utility. This comes after consultation with other officials during the ruling party’s national conference.

The party said that the relevant government departments should oversee specific state companies operating in select economic sectors.

Eskom currently falls under the department of public enterprises under minister Pravin Gordhan. The move would place Eskom closer to the hands of energy minister Gweded Mantashe, a keen proponent for coal-fired power plants to remain.

In October of last year, Mantashe said that the shift to renewable energy – which is deemed the next step of South Africa’s energy journey – will need to be a balancing act.

“(We) intend to move from high carbon emissions to low carbon emissions. However, we will do this in a manner that does not undermine our energy security, economic growth plans and sustainability of local communities,” Mantashe said.

When speaking on the notion that renewables could bring the end to years of rolling blackouts, he dismissed such, pointing to Europe’s recent backpedal to use fossil fuels.

Solar and wind plants could be used to supplement coal, gas and nuclear power generation, but had limitations when it came to meeting South Africa’s needs, such as supplying mines, said the minister.

“The excitement of moving from coal to renewables is becoming a myth.”

Despite this sentiment, South Africa has received billions of dollars worth of foreign investment with the main goal of shifting away from coal in the Just Energy Transition.

Rolling blackouts caused by Eskom are in no way said to stop. On December 27th 2022, the country reached 200 days of power cuts in 2022, which is 55% of the total days in the year.

On January 10th, the national power utility Eskom increased the frequency of power outages due to seven units tripping and moving to stage 6.

Eskom shake-up

The current move by the ANC comes as the national power utility’s CEO, Andre De Ruyter, is in the process of resigning.

On Wednesday, December 14th, the failing utility issued a statement announcing the resignation. De Ruyter is set to leave in March 2023, with no official replacement known.

Multiple calls had been made for the CEO to step down in light of ever-increasing load shedding. Gwede Mantashe summarily said that the CEO’s failure to stop load shedding was akin to agitating for the overthrow of the state.

Read: Load shedding pushed to stage 6 – here’s the new schedule