Rip Eskom Apart

By Glenn Ashton · 18 Mar 2014

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Picture credit: Pakistan Today
Picture credit: Pakistan Today

While rolling blackouts are never a joke, many South Africans cracked an ironic smile when Minister of Public Enterprises Malusi Gigaba remarked that Eskom was better prepared to deal with their recent power supply crisis than in 2008. Thanks for that insight, Minister.

Problem is, we still have rolling blackouts six years on, with things looking pretty dire as we approach winter. As usual we all pay, in different ways, for these systematic failures at the highest levels. Surely it is time to rip the inefficient beast that is Eskom apart, for once and for all?

Our most recent energy crisis comes against the background of the total withdrawal from Parliamentary consideration of the Independent System and Market Operator Bill, which potentially could have opened up our power market by levelling the playing field away from Eskom domination, enabling broader access to energy suppliers. The government shelved this bill for reasons which remain unclear. This all seems to run counter to Energy Minister Ben Martins’ statement that Eskom could no longer be player, referee and linesman in the energy sector, when he spoke at a recent Energy Indaba.

The Independent Operator Bill has been in the pipeline for nearly four years, through several iterations. The fact that our Minister Gigaba feels sufficiently strongly to defend inefficient behemoths like Eskom, then we have a problem. While Ministers Martins and Gigaba may demonstrate public solidarity, their policy positions are incongruous.

In reality, the ongoing incompetence of Eskom to manage its affairs is inescapable. Not only has it failed to pull Medupi contractors in line, but it attempts to abrogate responsibility for wet coal. There are multiple levels of irony, piled one atop the other. First is the quaint way we refer to “load-shedding,” rather than black- or brownouts, in our uniquely South African attempt to render such unpalatable reality more politically correct and expedient.

Second is how the most recent crisis was triggered by record breaking late summer rainfall, symptomatic of climate change. As one of the world heaviest polluters, South Africa, with Eskom in the lead, has failed to deal with its disproportionate emission levels. To further rub salt into this wound in the fabric of the ecosphere, Eskom, along with one of its suppliers, Exxaro, openly boast that we have 200 years of coal reserves, emphasising how this commercial vision blinkers our national energy policy.

In fact Eskom recently went yet further, asking for exemption from the stipulations of our long delayed National Air Quality Act because it would be too expensive to comply. Despite knowing about these requirements since 2004, Eskom has failed to address them. Even the proposed scrubbers for Medupi are to be postponed, indicative of a dismissive attitude toward the Air Quality Act.

Then there is the paradox that the company responsible for supplying sodden coal to Eskom, rendering the huge Kendal power station inoperable, was Billiton Coal. This is a division of the same transnational corporation, BHP Billiton, which receives Eskom power at prices well below cost for its Richards Bay aluminium smelters, devouring nearly 10% of our national energy supply.

Billiton Coal enjoys similar commercial confidentiality to Billiton Aluminium, where years of legal probing eventually revealed the true facts of its outrageously beneficial contracts with Eskom. The Billiton Coal contracts are similarly inaccessible, limiting public oversight of this serial failure. Given the strategic impacts of these failures on our national economy, these agreements should be closely scrutinised, with the guilty party held to account. Surely it is not the business of the state to subsidise massive transnational corporations? The National Energy Regulator really ought to show its teeth, if it has any.

Whichever way you cut it there is little good to coal power generation. Not only does it generate greenhouse gases, it also dumps over 200 tonnes of mercury in our soil and seas every year, along with a broad range of other nasty pollutants. Emissions are directly responsible for tens of thousands of deaths and illness. It destroys natural resources where it is mined. Despite all of this it remains central to Eskom policy for the foreseeable future.

The luxury of monopoly has blinkered Eskom to the extent that it simply cannot see beyond coal and nuclear. While it has commissioned some wind energy, this was only because of a compulsory offset for its World Bank loan to build Medupi and Kusile Coal stations, in a sop, a greenwash, to alternative energy.

So how should we restructure our overweight energy monopoly? Almost all energy analysts agree that the grid, that is the power lines and network to connect our national energy system, should become a stand-alone entity. This would immediately reduce Eskom dominance. It would also encourage the development of a smart grid, with an increased shift in focus away from large power plants toward decentralised medium, small and micro energy suppliers.

A major advantage of opening up the system, particularly to smaller operators, is that they are primary drivers of employment and economic growth. Eskom’s historical focus has been an energy supplier to mining and heavy industry, such as the steel and petro-chemical industry. This sector is contracting and shedding jobs. If South Africa is to become globally competitive it needs to shift toward a far more diversified economy premised on beneficiation and value-add to these primary industries.

Beyond creating a stand-alone smart grid, it is imperative to shift toward gas as a transitional fuel as part of the shift away from coal. Converting some of the older Eskom power stations, which are running out of locally accessible coal, to gas power would be one way. Another is to replace our hugely inefficient diesel driven turbine generators with gas. By securing preferential rates from neighbours like Mozambique and Tanzania, each of which have massive gas reserves, we could rapidly start to transition toward a cleaner economy.

We should also increase research around ground-breaking new power sources. Modular concentrated solar power plants are one concept that South Africa ought to have researched rather than wasting billions on the Pebble Bed nuclear pipe dream. Another is to develop viable current generation modules to tap into the Mozambique Current running down our east coast at a constant 5 kilometres per hour.

By coupling these opportunities to other emerging decentralised energy sources of energy, such as cross-subsidised domestic and industrial solar installations, South Africa could come to the forefront of international energy and policy development, while creating employment. In the final analysis, anything would be an improvement on the antediluvian, monopolistic state run Eskom dystopia that has actively prevented the emergence of a vision of a better energy vision for all. We certainly have sufficient resources – they just need to be prised from Eskom’s greedy clutches.

Ashton is a writer and researcher working in civil society. Some of his work can be viewed at www.ekogaia.org.

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Sean pretorius
19 Mar

Eskom

Hi, what a brilliant article!! I am a small farmer trying to make it by farming. Eskom however is charging me R18.09 per kWh due to costs such as service charge per day, network charge per day, enviromental levy, network reliability charge etc!!! Are the lines not running through farms to reach cities? Am I reimbursed for land I can not use due to ESKOM lines?-NO. People in municipalities( cities etc.) pay the council R.060 per kWh and maybe up to R1.50. Why am I paying R18.00!!!!! I also now receive a bill from the local municipality for land tax. They provide no service not even maintaining gravel roads. But I am blocked in installing a prepaid 3 fase meter as Eskom will then lose the money they are overcharging me!!! If all farmers paid the same, fair price for electricity, we could create a million jobs tomorrow!!! I have complained to Eskom, Nersa, Solidariteit, Afriforum etc. to no avail. Just a way to tax white farmers off their land? I bought this small farm after democracy, in 2006. What is going on???? A seasoned reporter such as yourself should bring these issues to the fore. Great Reporting!!!!!!

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Rory Verified user
21 Mar

Crony Capitalism

A great article indeed! However I wonder whether Eskom is solely to blame for its monopoly status in the energy sector and its addiction to coal? State enterprises are loved by crony-capitalists and our government seems to be replete with those. In addition I understand that, BEE would be capitalists, are opening new coal mines and a coal guzzling Eskom is a guaranteed income stream for them. In the light of these things environmental and healthy employment is seen as irrelevant by the decision makers.

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