International Relations and Cooperation Minister Naledi Pandor questioned why power plants kept failing, calling that “an act of opposition against South Africa.” This comment echoed those of mineral resources and energy minister Gwede Mantashe, who said the utility “is actively agitating for the overthrow of the state.”
These are two statements from cabinet ministers who are concerned about the detrimental effects of stage six load-shedding on people’s lives and livelihoods. This indicates that there is some agreement among cabinet ministers that Eskom must be fixed immediately.
Intentions to integrate state-owned enterprises (SOEs) into line departments were supported by ANC delegates at the party’s 55th national conference held on 16-20 December 2022 at Nasrec in Gauteng.
This means that Eskom must be transferred to the mineral resources and energy department, Transnet and SAA to the transport department, and Denel to the defense department. The ANC delegates made a critical decision that is structurally sound in terms of reforms. This decision will improve transparency, provide certainty with clear direction of SOEs, and hold responsible departments accountable.
This also allows for faster decision making and execution and eliminates unnecessary bureaucracy involving numerous often misaligned departments. The confusion caused by the often conflicting messages from the department of mineral resources and energy and public companies department will be eliminated and will provide certainty to citizens and investors. This decision establishes a clear “one stop shop” and “one message” for energy related issues.
Mantashe pledged to end the load reduction in less than “six to 12 months”, which was supported by Finance Minister Enoch Godongwana. This makes the ongoing attacks against Mantashe strange and suspicious. A closer look at the state-owned companies operating under the department overseen by Mantashe reveals clear signs of a change.
Each of the 12 state-owned enterprises has improved and stabilized under his leadership. In the prior fiscal year, the mineral resources and energy department received six unqualified audits with no findings and five unqualified audits. This indicates that out of 12 SOEs, 11 had unqualified audit results and six had clean audits, which is a significant improvement.
A closer look at the recent acquisition strategy by the Central Energy Fund (CEF), an entity under the department of mineral resources and energy, shows that they have a strong professional team and a strong financial position. This is demonstrated by the strategic acquisition of a 50% stake in BP Southern Africa’s Cape Town Terminal, which has a storage capacity of some 86 million liters of diesel, gasoline, jet fuel and lighting paraffin.
CEF acquired a 60% stake in Avedia Energy, owner of the liquefied petroleum gas (LPG) terminal in Saldanha. CEF completed the acquisition of a 30% stake in the Republic of Mozambique Pipeline Company, increasing its capital from 25% to 40%.
This can be extended to the Geosciences Council, which has published more than 90% of geological data online for free to boost exploration activity in the country from 1% to 5% of global exploration spent. The council is testing technologies such as carbon capture use and storage in Mpumalanga.
It should be noted that these attacks are not targeting the stage six indefinite load disconnection, or any other bankrupt state-owned company under the department of public companies. This leads me to believe that the load shedding may have been created in an effort to cause an energy crisis, anger the public and sell Eskom for R51 similar to selling SAA.
The justification for the sale of SAA is still unclear and is subject to trial. The explanation given is that the privatization of state-owned companies is an essential reform for the nation’s economy, according to the minister of public companies, Pravin Gordhan, quoted by Bloomberg. So there is a clear indication that Eskom, Denel and Transnet already have buyers who will not pay more than R51.
These attacks on Mantashe must be characterized as narrow, greed-driven, and personal. These attacks concern renewable energy, restructuring and unbundling of Eskom for privatization and liberalization of energy markets (eg plans for a power swap).
These people seem to know that Mantashe will be able to fix load shedding in the short term. Which means his plans to shrink Eskom, unbundle, privatize and sell off R51 will not happen under the Mantashe-led department. This also means that the free rein of the renewable energy lobby and its backers is over.
Priority will be given to a pragmatic and balanced energy mix guided by the Integrated Resource Plan (IRP2019) which includes coal, nuclear and gas. The minister has been called a dinosaur and many names.
These attacks should be seen as the last kick of a dying horse: Eskom’s exclusive milking for unsustainable renewables will come to an end, and a thorough audit or assessment should be carried out to compare renewable energy performance with planned performance and capacity. contractual.
We should have enough information to finish this effort. Meanwhile, the mineral and energy department must never be intimidated by renewable energy lobbies and must never become a ministry of renewable energy. If they give way, we will never recover from permanent poverty, unemployment and inequality.
The ANC delegates were right to agree that it is impossible to deny the existence of climate change. But they stressed that the energy transition must be managed carefully to avoid undermining development and having a detrimental effect on people’s lives and livelihoods.
South Africa also has extensive mineral resources of uranium and coal for coal and nuclear power generation. Therefore, concentrating on gas, nuclear and coal could have a significant effect on employment and economic growth, which could help reduce poverty, unemployment and inequality.
As a sovereign nation, South Africa has the right to select its energy sources. Energy policy cannot be left in the hands of NGOs and a select group of people with economic interests in renewable energy.
National interests play a role in the energy debate. Energy remains at the center of development; it is also about national security and independence. A country’s access to energy determines its destiny.
A balanced energy mix should take priority, guided by IRP2019. This means that South Africa must be allowed to proceed with the exploration, development and exploitation of its natural gas both offshore (in the Orange Basin) and onshore (in the Karoo Basin) without funded NGOs foreigners intimidate her.
Siyanda Mngadi is director of Ntuthuko Resources, Energy, Mining and Exploration. She writes in a personal capacity.
