Business Leadership South Africa (BLSA) today called for South Africa to fast-track the process to diversify its energy path away from Eskom as the sole energy producer in the country, in a scenario where the country is not held to ransom by industrial action.
This as South Africa faces another gruelling week of load shedding as Eskom tries to hike its generating capacity in the wake of illegal industrial action taking the already struggling power utility to its knees.
Eskom continued to implement Stage 2 and Stage 4 rotational power cuts throughout the weekend, as industrial action continued after wage talks at the Central Bargaining Forum on Friday, were not concluded.
“The load shedding of last week was devastating. I have been told of companies forced to lay off staff because they simply couldn’t open their doors. Those with generators couldn’t get diesel to fill them fast enough. Those on batteries found them running dead.
“This was obviously also a crisis for Eskom, with the loss of generation capacity directly linked to illegal labour action, accompanied by sabotage and violence,” she said.
She said the signs were clear that the future electricity market would be a diverse one.
“We cannot rely on a single state utility any longer. We have known this for some time and had we acted more vigorously sooner, experiences like last week could have been avoided,” Mavuso said.
“And in that scenario, industrial action at one producer does not necessarily result in load shedding. I suspect that those on strike foresee that future and the effort to extract higher wage concessions was driven by the knowledge that one day it will be impossible to hold the country to ransom,” she said.
Eskom had made progress:
∎ The private sector can now build plants of up to 100MW, without a licence.
∎ Eskom had made land it owns in Mpumalanga available to independent power producers (IPPs). A fortnight ago, Eskom chief executive André de Ruyter announced the first 18 successful bidders for leases on this land. They will each put up 100MW plants, adding 1.8GW in capacity to the grid.
∎ An acceleration in other IPPs registering new plants with the National Electricity Regulator of SA. The regulator has so far approved 18 amid an “avalanche” of applications.
∎ Red tape: last approvals for IPPs were done in 19 days from receipt of the application. That is a positive sign that red tape has been removed from the process of private generation.
As various factions in South Africa last week called for the resignation of De Ruyter, such as the South African United Business Confederation and Black Business Council (BBC). In light of the power crises Mavuso was at pains to point out that De Ruyter was being transparent and accountable.
“Yet Eskom chief executive André de Ruyter was front and centre to explain to the country and to business about what was happening. He availed himself to address the BLSA Council to explain the situation on Wednesday, and kept the country informed via the media. The openness was welcome,” she said.
This as the power utility has seen a spate of CEO’s heads roll at the utility due to its ongoing problems that have spanned more than two decades.
Last week, Kganki Matabane, BBC CEO said, “The continuous rolling blackouts and load shedding by André de Ruyter, including moving the country to Stage six, giving a plethora of excuses, is unacceptable for a struggling economy trying to recover from the impact of Covid-19.
“Until and unless the government, as shareholders, takes the drastic steps to remove the incompetent management and inadequate Eskom board, who have time to come with laughable excuses such as continuously blaming state capture, instead of solving the electricity generation challenges, the country must forget about any prospect of economic recovery,” Matabane said.
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