Eskom: Treasury, do not burden South Africa with unnecessary debt

Ultimately the president confessed that he was naive to have been hoodwinked by the West into the renewables, while the West failed to come to the party, the writer says. Picture: Bhekikhaya Mabaso

Ultimately the president confessed that he was naive to have been hoodwinked by the West into the renewables, while the West failed to come to the party, the writer says. Picture: Bhekikhaya Mabaso

Published Jul 3, 2023


I have consistently argued that Eskom is an engineering cum economic science-based behemoth. It should be led by science.

Politicians who are not schooled in science should not pretend to understand this behemoth outside the remit and strict command of engineering and economic instruction.

And NOT political accountancy.

This should be based in the first instance on the scientists that are at Eskom, and those who have done decades of duty at power-generation plants

The good news as Adil Nchabeleng’s column states in Business Report on June 28 under the title “Strategic Insights: Ramaphosa wins climate funding summit debate” is that the penny seems to have finally dropped, but sadly too late, after extensive damage to limb, life and livelihoods has been impugned.

Be that as it may, confession is important because it is the first step towards atonement and remedy. It constitutes an important step towards rebuilding.

Ultimately the president confessed that he was naive to have been hoodwinked by the West into the renewables, while the West failed to come to the party.

In disabusing his presidency of this naivete, he made a bold proposal at the Macron Summit in Paris by suggesting the Grand Inga Dam as a critical step to ensuring energy security in Africa. This was a marked step from the $8.5 billion (R160.1bn) carrot dangled before him that he swallowed hook, line and sinker. The seed leading to this naivete was, however, planted long ago. It consists of dividing this engineering cum economic behemoth called Eskom into three and thus readying it for privatisation.

This three-way dividing was not advised by this category of people I referred to the engineers and economists. But it was led by accountants who were eager to trace balance sheets and money flows. It included the green lobbyists.

So, the design is completely anti-engineering, anti-economics, unscientific and can only be a financial disaster that will spawn even more economic woes.

Generation and distribution are complex thermodynamic processes, whose main attributes in the context of variable energy forms of solar and wind are anchored in the optimisation and stable system inertia.

Unlike river and dam systems where pump station and storage are finite and water gates can be opened and closed, in contradistinction electricity is a continuous flow and flows from generation, distribution and consumption.

So, creating artificial bureaucracies of storage dams’ equivalents is a ludicrous, unnecessary and expensive supernumerary obstruction, hitherto miniscule battery storage capabilities notwithstanding.

This fundamental naivete has further created falsehoods in science, in engineering and in economics. This spurred an oversized ego around renewables, battery storage and ambitiously uninformed demand for grid extension.

The apartheid design of the energy system understood that electricity fears distance. To this end, system optimisation by variable sources of energy took the spatial attributes of energy materials and needs into account. So, they looked at coal and nuclear as inputs of a system optimisation design.

Mthunzi Luthuli, the CEO of Economic Interventions Forum of South Africa, in a lightning-rod column in Business Report of June 28, illuminates and elegantly dismisses the falsehoods of the Johnny come lately to town science, engineering and economics of naivete. He explicates this under the title, “An Analysis of the true cost of renewable power in South Africa”.

Ramaphosa’s presidency and South Africa would benefit immensely and be the wiser from this critique. They would peel off this blur of naivete.

The Treasury preparing a condition for taking on Eskom debt, which in the first instance was economically unfeasible as a user-pay system, has just deepened the naivete.

In February, 2023, National Treasury appointed the German VGBE Energy Consortium to assess and investigate the operations of Eskom’s coal fleet. The assessment will consider putting in place a concession model which could see original equipment manufacturers (OEMs) brought in to turn around and improve the energy availability factor, and performance of Eskom’s coal-fired power plants.

So, by controlling the accountancy purse Treasury has overstepped its mandate. This is the usual arrogance of finance and accounting over engineering, science and economics. Political arrogance finds expression in similar ways.

Former engineering luminaries of Eskom Matshela Koko and Jacob Maroga have pointed out what the problems at Eskom are and what the solutions should be. They are not about an old fleet, but they are simply about giving power station managers the independence to maintain and manage power stations. André de Ruyter’s departure has seen a magical wand undoing his abracadabra scheme.

When asked, Eskom’s chairman of the board, Mpho Makwana, iterated the medicine Koko and Maroga had for months put across. Makwana swallowed the medicine and viola, South Africa dropped from load shedding Level 12 to load shedding Level 2. If Komati can be revived out of the homicidal hand of the government from the dead as part of our atonement and confession of presidential naivete, then load shedding Level 1 is in sight. True to form, King Coal Mantashe will be correct, that load shedding will be history by election time next year.

What political activist Noam Chomsky has taught us is the chicanery of capital and its greed for privatisation. If there is anything to learn from the statement of President Cyril Ramaphosa about his naivete on the matters of energy interests – it is the byline of Chomsky on capital and the shock therapy it impugns on society.

Chomsky said, “Privatisation technique: defund, make sure things don’t work, people get angry, you hand it over to private capital.”

The president has confessed. Now let us get Komati back and start thinking and constructing the science of Just Energy Transition as a science, engineering, economics and a mass-based societal concern.

Hugo Kruger, a nuclear civil engineering Afrikaner based in Paris, France, is worth quoting, who says: “Breaking up Eskom will be the end of South Africa.” Our Treasury brigade need not look far – we only need to take a sip of Koko’s and Maroga’s concoction and Eskom will be up and kicking.

No need for an expensive illusion of grandeur OEM. Eskom has worked without these before; it will do so today and tomorrow. Treasury, do not burden South Africa with unnecessary debt!

Dr Pali Lehohla is the director of the Economic Modelling Academy, a professor of practice at the University of Johannesburg, a research associate at Oxford University, a board member of the Institute for Economic Justice at Wits, and a distinguished alumni of the University of Ghana. He is the former statistician-general of South Africa.

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