South Africa – Andre de Ruyter, Eskom CEO, has handed in his resignation. This comes as loadshedding has worsened and after attacks from Minerals and Energy Minister Gwede Mantashe and others. Eskom released a statement confirming his resignation stating he will remain in office until 31 March 2023.
De Ruyter was appointed in 2020 and oversaw the worst levels of loadshedding on record. Over the last few months, public enterprises minister Pravin Gordhan has faced mounting calls to get rid of De Ruyter. Several stakeholders also called for De Ruyter and the entire Eskom executive to be replaced. Ted Blom, energy expert, believes De Ruyter focused too heavily on renewable energy which eventually caused his downfall.
“He inherited a business that 85% of its generation capacity is coming from coal. Initially, he made the right noises and said he was going to refurbish that stuff. He had R80 billion at his disposal, which he chose to repay early debt, instead of putting it towards the fixing up of the coal plants. I don’t think you get in charge of a coal based generation plant and it’s within your purview to change strategy and say I’m going to dump all the stuff that I’ve got. That’s been running for 100 years and I’m going to go into untested renewables where the EAF (Energy Availability Factor) is below 20%. In fact, it’s below 15%, when on average properly maintained coal has EAF of above 80%.”
The loss suffered under De Ruyter
Loadshedding has impacted households and businesses drastically. It has been estimated that loadshedding has cost the country around R556 billion. However, Blom argues it has cost the country a lot more. The research only took into account the direct cost and not the losses suffered by businesses.
“They’re only taking in the direct cost of loadshedding or unavailable energy. If you take in the disruptive cost, your whole day is messed up with loadshedding. Your staff is messed up, you’re sitting with staff coming for the eight hour shift and I can only work four hours etc. There’s a disruptive effect. It is five times higher. It has caused this economy more than R2.5 trillion.”
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De Ruyter is gone but those who put him in power are not
While Blom believes De Ruyter resigning is good for the country, he wants those who put him in power to resign as well. It is not right for De Ruyter to resign but those responsible for his placement remain unpunished.
“We would have thought that the government, Pravin Gordan in particular, would have applied his mind properly before deciding to make a political appointment. He had excellent other candidates with deep engineering experience, deep Eskom experience, and deep utility experience to choose from. I think the ANC must be held responsible. De Ruyter has wasted three years of Eskom time. We’ve lost three years of fixing up Eskom.”
Blom is certain that within these three years, a different team could have resuscitated at least 20% of the coal system by now. That is equivalent to 6 000 megawatts which is six levels of loadshedding, said Blom.
The future of coal
Germany is one of those countries who have taken a strong stance on becoming clean and having renewable electricity powering their country. However, what they say and do are two different things, said Blom. They have recently reopened their coal power plants due to the short supply of gas because of the Russia-Ukraine war. However, how Germany runs their coal power stations is very much different to how Eskom does it.
“Those coal power stations were much older on average than Eskom’s. So, it’s not a question about how old the plant is but how it has been maintained. De Ruyter had that opportunity but he messed it up. Coal in Germany and first world countries isn’t run like how Eskom runs it. Eskom runs it with lots of pollution and lots of corruption … We don’t need to run dirty coal. We can run clean coal. The technology is available … It’s just the way that Eskom runs it with no regard for people and the population and the customers. It can be 75% cheaper than its current price.”
Germany and other first world countries run coal power stations with zero emissions. Besides the vibrations from the turbines, one wouldn’t even know they are near a coal power station, explained Blom.
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The right next step for Eskom
With De Ruyter gone, the next step is crucial. Loadshedding cannot continue. For Blom, the government needs to create a task team to take over Eskom and release their political hands on it. He firmly believes the right people can substantially reduce loadshedding within 12 months and save Eskom in three to five years.
“You need to appoint specialists turn around people who’ve got the experience because Eskom is now in ICU. They need to put a team together. It’s not a one-man job to fix up Eskom, especially in this particular state. I’ve been asking, advising on a possible turnaround team together with other experts. If we are given the mandate, we’ll fix that thing and get it running with minimal loadshedding within six to 12 months. We can probably recover the debt, pay it all off and reduce your price of electricity within a period of three to five years. All that is possible but then we need the political snaps out of the top.”
