Of all the projects that the administrations of Presidents Thabo Mbeki, Jacob Zuma and now Cyril Ramaphosa have undertaken during almost 30 years of democracy, the catastrophic management of the expansion of the country’s electricity generation capacity will be the most damaging in the long run. country term. prospects
At the center of those urgent expansion plans first presented to lawmakers as early as 1997 was the utility Eskom.
The urgency of doubling Eskom’s generation capacity became clear to company directors 25 years ago when the economy and, in particular, the mining and industrial sectors came back to life after crippling international sanctions in the middle of the decade. of 1980 as a result of apartheid.
Nelson Mandela’s administration also brought electricity as part of the Reconstruction and Development Plan (RDP) to millions of previously excluded South African households.
Although South Africa has had global growth well below expectations for the past three decades, GDP per capita growth has improved, growing at 1.6% per year between 1994 and 2000 and 2.2% between 2000 and 2009, compared to global growth of 3.1% during the same period.
It’s an expansion that Eskom, led by Thulani Gcabashe, had warned would come just as most of its coal-fired power plants, spread across Mpumalanga, were nearing the end of their useful lives.
The average age of the coal fleet, excluding the more recently built Medupi and Kusile, is about 41 years. Historically, plants have been retired with an average lifespan of 46 years around the world, but can operate for 50 to 60 years if properly maintained.
The expansion of Eskom and the country’s generating capacity was imperative and something the Mbeki administration and the ruling ANC were well familiar with.
Factional battles with what were at the time strong alliance partners in the labor federation, Cosatu, and the South African Communist Party over privatization would, in the end, delay a decision to give Eskom the go-ahead to start not only to replace its aging fleet. but creating additional capacity.
Indecision in the Mbeki administration was followed by the corrupt, aimless and confidence-sapping era of the Zuma administrations, hampering the country’s response to a predicted electricity crisis in 1997. The Ramaphosa administration suddenly emerges amid of the crisis, and its response has been disconcerting.
He mail and guardian this week has tried to paint the full picture of why South Africa is emerging into a new year with load shedding that has the country dealing with power outages of up to 12 hours.
The most critical period of Eskom’s generation capacity rebuilding project was when Jeff Radebe, former ANC policy chief, was Minister of Public Enterprises from 1999 to 2004.
Radebe was unable to respond to the challenge of securing electricity supply, instead focusing on economic regulation and competition in the 2000 policy framework for public companies.
Radebe’s successor, Alec Erwin, architect of the framework along with Radebe and then finance minister Trevor Manuel, responded to the electricity crisis, which began in 2005, but failed to come up with a plan to halt load shedding, which began in your watch.
Erwin’s initial response to the first load shedding episodes in 2005, the Koeberg power station failures, was to falsely claim sabotage, setting the tone for the ruling party’s response to the crisis ever since. .
In January 2008, Erwin said the government “foreseen a reduction in the burden” but promised it would end in about four weeks.
In May of the same year, Erwin rejected a call by the ANC—and opposition banks—for an independent investigation into Eskom after an internal report pointed to mismanagement at the bank.
The ruling party had planned to ask Mbeki to name the inquiry at the national electricity summit in May 2008, launched by the ANC and its alliance partners, but Erwin canceled the move in parliament, telling MPs that the South Africa’s National Electricity Regulator ( Nersa) was already investigating and dismissed the call as an opposition plot.
“Nersa is loaded; she has a responsibility to investigate Eskom,” Erwin said in a parliamentary debate at the time. “Eskom has been and will be investigated and Nersa is obliged to make its reports on Eskom and load shedding available to her. Calling all the time for an independent investigation is just an attempt to get a commission themselves. The structures are there.”
Erwin also reversed previous support for Eskom’s proposed rate increases, which he had previously backed publicly, saying that while this was the quickest way to deal with the crisis, there were other ways to do it. It did not provide the necessary budget for maintenance and new construction.
Erwin recognized the need to “double our generation capacity in the next 20 years” and “diversify our primary energy sources away from coal,” along with the need to stimulate a domestic manufacturing sector focused on renewables.
Addressing the public company’s holding committee, Erwin admitted that the planned power plants “could alleviate the crisis in the short term” and that the reserve margin, which had fallen from 22% in 2002 to between 8% and 10% in October 2008 — meant four years of load shedding to reduce demand.
Erwin told parliament that he was happy with the progress in the planned construction of new power plants and that the supply problem would be resolved within five to eight years.
it was not
Much has been written about the systematic corruption of Eskom during the terms of Malusi Gigaba and Lynne Brown as ministers of public companies, thanks in large part to the Zondo commission.
Brown facilitated Brian Molefe’s secondment to Eskom from Transnet at the “insistence” of the Gupta family, the Zondo estate’s capture report noted, after four top executives, including CEO Tshediso Matona, were suspended on orders issued during a meeting at Zuma’s house. . Of the four, only Matshela Koko was reinstated.
By then, Eskom’s board of directors was weighted with family allies at the center of state capture. Brown was aware, but told Zondo’s commission, “I spoke to a number of them at the time and I didn’t think I should fire them because they were linked to the Guptas.”
Molefe briefly convinced the country that it could contain the load loss by “playing Tetris” with the network. It meant focusing on maintenance and finding the money for it no matter what, but constantly adjusting work hours to bring enough generating capacity back online to offset unplanned outages and keep the lights on.
Load shedding ceased for about a year, mainly as a result of weak demand, but Molefe warned it would return unless the country acquired 9.6 gigawatts of additional nuclear generating capacity. In 2016, it refused to sign R58 billion purchase agreements for renewable energy projects, deeming it impractical and too expensive.
At the same time, Molefe claimed that Eskom could manage the cost of a nuclear build and convinced then-energy minister Tina Joemat-Pettersson to appoint the utility to lead the acquisition process.
The reckless nuclear push was eventually halted by a legal challenge in the Western Cape high court, but by then it had wreaked havoc in the way Zuma sacked finance minister Nhlanhla Nene for refusing to sign a letter of commitment to Russian authorities. .
Meanwhile, Zuma had assigned Ramaphosa to oversee the recovery of Eskom, the South African Post Office, and SAA. Ramaphosa ran “the war room”. Neither SAA nor Correos have survived the ineptitude of the government.
The war room comprised the departments of energy, cooperative government and traditional affairs, public companies, treasury, economic development and water and sanitation, as well as experts from Eskom. The blueprint for the war room was the cabinet’s five-point plan, which included interventions such as expanding existing contracts with the private sector, swapping diesel for gas, and “launching a government-independent power producer program.” Coal”.
In the background, Molefe and then mineral resources minister Mosebenzi Zwane had effectively fought Glencore’s Optimum Coal Mine to allow Tegeta to acquire it and sign a R3.7bn contract with Eskom to supply its Majuba plant. When the managers refused to accept low-quality coal from Tegeta, Koko intervened and told them to use it. The deal was eventually declared illegal and annulled by the Pretoria high court in 2020.
The following year, the same court ordered the Minister of Mineral Resources and Energy, Gwede Mantashe, to release planning documents related to 1,500 new megawatts of coal-fired generation included in the 2019 Integrated Resource Plan. It dismissed his argument that there was no could do so because the plans were not reviewable. Mantashe has criticized foreign funding for a just energy transition as “colonial interference” and obstructed the procurement of more renewable energy for the grid.
As Anton Eberhard of the University of Cape Town Graduate School of Business pointed out days ago, not a single megawatt of publicly purchased renewable energy has so far been added to the grid under Mantashe’s watch.
In December, Mantashe finally signed contracts for 13 projects approved during bidding window 5, which followed seven years after the previous round, but these will only come online in 2025 and add just 975 megawatts to the grid. The necessary context here is that the first four bidding windows resulted in some 100 projects producing 6,400 megawatts.
Mantashe’s stated objection is that Eskom’s problem is not generation but transmission, yet the $8.5 billion Just Energy Transition Plan he deplores makes provisions to alleviate the problem.
What is required to enable the addition of more renewable energy is to reconfigure a grid historically geared towards transmitting power from coalfields in Mpumalanga and the North West to connect solar and wind power generated in the Northern, Eastern and Western Cape.
It’s a costly and long-neglected exercise that energy experts say can only be solved through structural reform that relieves Eskom of responsibility for transmission, leaving it in the hands of a separate company not tied to utility company debt problems.
But Eberhard suggested this week that unbundling has been delayed by Public Enterprises Minister Pravin Gordhan’s ideological aversion to ceding state control to an independent structure.
Only Ramaphosa can overcome these hurdles in his cabinet and consider the wisdom of leaving Mantashe in charge of power when, as promised, Eskom returns to that portfolio.
