PRESIDENT Cyril Ramaphosa has given a glimpse into the mooted plan by government to resolve the ongoing energy crisis through the creation of another state-owned power utility.
This comes after Eskom plunged the country into Stage 6 power cuts last month, with power generation deteriorating to its worst levels since December 2019, due to plant breakdowns that were worsened by a lack of maintenance during a strike by workers.
Ramaphosa said on Friday that Eskom’s monopoly of electricity supply was posing a “risk” to South Africa’s economy amid its years-long failures to meet energy demand.
He said the Minister of Minerals Resources and Energy Gwede Mantashe had proposed a second state-owned power utility be established.
“It is a risk to have one electricity (provider) owned by the State and that is why I agreed with Gwede Mantashe that it is time for another state-owned electricity company,” Ramaphosa said, adding “Right now we are exposed to a massive risk, with a single company having monopolised our energy sector with power stations that are 50 years old and Eskom in distress for 15 years now.”
At the SA Communist Party (SACP) Congress on Friday, Mantashe confirmed to journalists that he had proposed the creation of another power utility to alleviate pressure on Eskom.
However, Democratic Alliance representative on public enterprises Ghaleb Cachalia rejected the idea, saying it proved beyond any doubt that Ramaphosa’s government was completely clueless on what needs to be done to address the electricity crisis.
“South Africans are going through the worst load shedding schedule on record and the best that the president and his Cabinet can come up with are 'Alice in Wonderland' fantasies – straight out of a Soviet-era playbook,” Cachalia said.
Ramaphosa said South Africa should look east and adopt a model of multiple state-owned power utility companies, such as had been done in China.
China has at least five large, state-owned power utilities, which generate electricity from multiple sources such as coal, gas, oil, solar, wind and nuclear.
However, China’s struggle with a severe shortage of electricity in 2021 left millions of homes and businesses in the dark as the country tried to reduce its reliance on coal, which is responsible for more than half of its power.
“China has a number of state-owned electricity companies that compete amongst themselves, leading to prices going down. That is what we should look to and that is the future that we should begin to imagine,” Ramaphosa said.
“We are at risk with Eskom, with one company generating electricity with an old coal fleet. Today we are experiencing a great risk in that we are placing the sole responsibility for electricity generation in one company.”
Ramaphosa’s pronouncements come as he is expected to announce an “energy emergency” plan.
He confirmed on Friday that he will be announcing interventions in the coming days to bring new electricity onto the grid to avert the country being plunged into darkness.
The Koeberg Alert Alliance (KAA), however, said this talk of a need to declare an “energy emergency” was at least partly an excuse for past inaction, specifically by Mantashe.
“We don’t need regulations bypassed, we just need existing processes to be used and fast-tracked where necessary,” said KAA spokesperson, Peter Becker.
“The first step, which is entirely uncontroversial, universally supported and should be done today, is for the Minister to issue a section 34 determination for all of the remaining renewable energy capacity already planned in the Integrated Resource Plan of 2019.”
Meanwhile, Ramaphosa also fended off criticism that the ANC-led government was trying to privatise Eskom and other state-owned companies (SOEs) for the benefit of the few private players.
“We are not trying to privatise our SOEs; instead, we are embarking on a reform strategy. Our SOEs will remain in public arms. Rumours that we are selling our SOEs is a lie,” he said.
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