The Power situation in the country

By Time of article published Nov 15, 2021

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Jaco de la Rouviere

The recent spate of load shedding in the country has painfully highlighted the underlying threat of transmission loss. These events of load shedding are only symptoms of a much greater and dangerous situation of long-term systemic failure, which will inevitably and ultimately manifest itself in a National Blackout unless something radical is done about it.

In preventing ultimate transmission network failure, South Africa has enormous challenges to deal with due to our structure of energy delivery. When measuring a human’s health condition, we rely on blood pressure, heart rate, temperature and many other measurable indicators to establish the condition of the patient. One of the most important measurements giving the overall condition of the utility (Eskom) is the energy availability factor (“EAF”), which in Eskom’s case has inexorably dwindled down to between 58%-72% month-on-month for the past decade.

It is just a matter of basic probabilities to compute that if we have up to 58% of the generation capacity failing on an unplanned basis, the ultimate risk in SA relates to a nationwide blackout, and we need to be devising extremely urgent plans to prevent this disaster as a priority. We must also devise realistic plans to be able to recover from such a failure when it happens.

Eskom is currently actively attempting to resolve the arbitrary mechanical failures while dealing with a debt burden of more than R 400 billion – on which amount the interest surpasses its income.

Finance Minister, the Honourable Enoch Godongwana, in his medium-term budget policy statement, has voiced his concern over Eskom. Although this is commendable, Eskom, the National Treasury and other influential organs of State should now enforce their fiduciary responsibility in the strongest possible way, otherwise, their accountability will be escalated to the level of the Board and Management of Eskom.

We need to deal with the facts! Yes, the power generation machines are old and tired, but they were very well designed at the time, 50 years ago. Unfortunately, you can’t buy spares for the equipment at the local hardware store, with lead times often up to 24 months, adding logistical pressures. They withstood the abuse of neglected maintenance for 30 years and more but still produce energy for the nation.

Every morning, 60 million South Africans wake up with the goal of getting through the day, to survive, doing what they can to prepare for work- washing, dressing, travelling and trying to perform at their best to earn a living. Yet, it seems that the basic responsibility of the State to provide an environment conducive to this basic need still appears to be secondary to the political agenda of the day, Covid-19 related matters, state capture and corruption.

What the powers-to-be seem to misunderstand is that a nationwide blackout will affect all of us equally. There is just no way around this issue. All the petty party politics will not escape this national disaster.

Wet coal, inclement weather, bad maintenance, state capture and the like, will pale in significance if all the lights go out for the last time and there is no water three days later and no food five days hence, and when electronic money systems and records of money in banks and suchlike cease to exist. Under these circumstances, SA Inc. and the global community will be looking for someone to be held accountable.

Do we really need to experience this Public Administration Disaster to understand the danger and be educated, whilst there are voices of reason, practical cost effective and academically-sound, ESG compliant solutions presented to Eskom, the Department of Minerals and Energy, National Treasury, the IPP Office and the DBSA and other higher echelons of power, in writing and numerous times, throughout the years, falling on deaf ears.

Despite many setbacks, we, however, continued along a path of developing solutions to prevent an emergency of the proportions that a transmission network FAILURE may bring us.

We have reached our Power Rubicon, and South Africa is sitting at a T-junction. Eskom, as a State-Owned Enterprise (“SOE”) and all other responsible organs of State, must make hard choices for the survival of the citizens of the country, and it is necessary that the public be informed of the outcome of these decisions.

The FAILURE of the transmission network in its current state is a statistical fact, and immediate action needs to be taken, or at least responsibility needs to be allocated. The consequences will be dire, and it needs to be known who executed these decisions with a looming countrywide power FAILURE in the offing.

We at InovaSure believe it is furthermore possible to reconstruct Eskom’s debt burden and the National Treasury’s exposure to guarantees up to R350 billion on behalf of Eskom. Eskom’s CFO’s solution is that “Government must take over R200 billion of it.”

His point refers to Eskom being the largest beneficiary of $8.5 billion in loans and grants pledged to South Africa by nations, including the US and UK, at the recent COP26 climate talks and that Eskom cannot borrow more before getting rid of circa 50% of the existing debt.

The issue is not the reduction of debt in exchange for a higher entitlement, but his reference to an overburdened Government, with a debt to GDP ratio of more than 83% or R3.3 trillion Rand in 2020 or R55 000 per capita, which is expected to take it over.

In the next few articles, InovaSure will present the readers with its so-called “Magnum Opus” analysis of the power system and the solution to at least levelise Eskom’s peak demand curve, being the cause of most of the load shedding and the most expensive energy on the grid, costing SA Inc., in 2020, 1798 GWh in energy shedding and 659 hours in outages (CSIR - J. Wright – Business tech 14/11/2021) and cumulatively over the past 10 years as much as R338 billion.

InovaSure will also share its views on the complicated, ineffective, corruptive, self-destructing, cumbersome and clearly, in some cases, politically driven energy procurement policies, laws, rules and regulations, which could be streamlined and replaced with a Government accredited “trusted centre” approach, which is fully 4IR compliant and based on distributed ledger technology solutions, which will be impossible to break, as long as there is only just one honest individual in the procurement chain.

Jaco de la Rouviere, Chairperson of Inovasure (Pty) Ltd.

*The views expressed here are not necessarily those of IOL or of title sites.

BUSINESS REPORT ONLINE

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