Home Featured Dissecting the crisis plan to help Eskom

Dissecting the crisis plan to help Eskom

by Luqmaan Rawat

South Africa – The frustration of the country forced the president to announce a crisis plan to solve load shedding and help Eskom. On Tuesday Ramaphosa laid out a ten-point plan. While there is hope this can solve things, there are some who doubt the plan can be implemented properly.

The benefit to the plan is that it introduces competition  stimulating the economy by providing new opportunities for people to supply electricity. Although many points were laid out, what was missing from it was how the government was going to turn Eskom around, said energy expert, Crown Prince Adil Nchabeleng.

Unbundling Eskom could be worse not better

During the apartheid era, Eskom was doing what it needed to do, provide electricity. According to Nchabeleng, the government should have continued the legacy. All they did was extend the reach of Eskom without improving the infrastructure. Unbundling is not the solution as it will only hurt the consumers later on.

“Everywhere in the world, unbundling, which is privatisation in a very cosy way, has caused a lot of national problems. At some point the market is not going to play friendly towards the consumers and the nation when they need their pound of flesh in terms of charging prices that they want.”

Unbundling Eskom is something that most unions don’t want. After IISCO was unbundled, steel prices went up 1000% and this is likely to happen to Eskom as well, explained Nchabeleng. In a country that has a very high unemployment rate, the state needs to help consumers.

Brendan Slade, Organisation Undoing Tax Abuse Project Manager on Energy, believes unbundling will not cause runaway prices for consumers. It will, however, “result in more efficiency and more sufficiency of the particular operations and aspects which Eskom now as a single entity needs to perform”, he explained. The unbundling could provide competitive competition which could provide lower tariffs, he added.

Fixing Eskom should be the first priority

Having independent power suppliers might be a good idea now but is one that is not needed. What is necessary is for Eskom to function properly before there are any talks of introducing new players into the power grid. To do this, Slade stressed those who have the skills to run Eskom need to be brought to steady the ship. They then need to teach the younger generation to ensure Eskom runs smoothly.

“At the end of the day it is a question of how we will get the skills back that left. How will we retain those skills and how will we ensure that the skills are then transferred to create a ripe environment for proliferation of new jobs for the new youths coming in.”

This will not happen overnight. For this to happen all spheres of government need to cooperate with each other. The Department of Education need to ensure the right kind of education is offered to the youth, said Slade.

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The hypocrisy of the renewable push

South Africa is pushing consumers to go green by installing solar panels and using renewable resources. At the same time South Africa is also being pushed by the international world to go green. For South Africa to follow this model will be devastating on all, explained Nchabeleng.

“We are being used as a guinea pig for testing out a model which is supposed to be a futuristic model. It’s going to devastate the economy of South Africa. It’s going to devastate not only the economy, it’s going to devastate livelihoods and going to devastate the people living in this country. The plans themselves are not genuine at an international or global level.”

Nchabeleng pointed out how Germany have issued a mandate to open up all coal power stations and have called for new ones to be built. This is because of the gas shortage they are currently suffering. The green policies being pushed onto South Africa is something the country doesn’t need. We are a developmental state, and we don’t have the capabilities to move onto green energy as yet.

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The problem with battery storage

There have been talks of storing excess electricity in batteries. Although this idea is brilliant, battery storage is still in its infancy and is not a viable option for a number of reasons, explained Nchabeleng. A battery will only give you a set amount of energy over a small period of time. The other concern is where the energy will be resourced from.

What we should be doing is exactly what China is doing. Although they have signed the same accords as South Africa, they are putting their people first, said Nchabeleng.

“China says wonderful, we have agreed to all of these plans but remember we still have our own interests. We have our own baseline interest for our industries and development and our people’s lives. We will adopt the technologies and interest, but we will face it in such a way that it does not cause problems in terms of our development of our economy.”

Nchabeleng believes the current leaders are not the right people to do this. He points out that the president didn’t even engage with the experts in the field of electricity production.

Supplementing our power loss by buying electricity.

The plan also explains how South Africa will start to buy excess electricity from neighbouring countries. Although it is a good idea, the plan needs to be more detailed on this process, said Slade.

“We need to have an off-take agreement. Particularly if and when we need certain power. Coincidentally South Africa, at certain instances, have a surplus of electricity. So that will then result in us selling electricity back to neighbouring countries and vice versa. At the end of the day Eskom will become a more dominant buyer of electricity as opposed to a generator of electricity which is a double-edged sword.”

This is the only solution as Eskom doesn’t have the capital to build more coal stations. There are also a number of coal stations that are nearing the end of their lives. Until we can build more coal stations and increase our output, the only solution that is viable is buying electricity.

A number of points need to be more detailed and further discussions need to include the public and experts. The plan is by no means set in stone, but it is a plan that can work if the implementation is done right. The only way to solve the energy crisis is to follow this plan and build on it.

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