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2023-05-23 at 13:42 #405821Nat QuinnKeymaster
South Africans have shouldered the burden of load-shedding for more than a decade, since its first implementation in 2008.
In January this year, Eskom board chairperson Mpho Makwana claimed the state-owned enterprise (SOE) would improve the energy availability factor (EAF), pushing it up to 70% from its current 58%. The same sentiments were echoed by Mineral Resources and Energy Minister Gwede Manatashe, who – also in January – claimed the energy crisis would be solved in six to twelve months.
Over the last five years, Eskom’s EAF has been on a downward spiral and Professor Hartmunt Winkler of the University of Johannesburg warns South Africans to prepare for at least another five years of load-shedding. Professor Winkler says that the best South Africans can hope for is that we will be in the same position this time next year.
The likelihood of this is uncertain, as higher stages of load-shedding are forecast. The country is facing a shortfall of 6000MW of electricity, equating to up to stage six load-shedding.
Ongoing energy crisis
The ongoing energy crisis has been debilitating for the country and economy. Eskom has played a major part in cutting the National Treasury’s economic growth forecast for the year from 1.4% to 0.9%.
The government’s latest strategy to handle the crippled SOE involves three annual advances amounting to R254-billion through to March 2026. This bailout adds to the already staggering total of R263.4 billion in bailouts handed to the parastatal since 2008.
This bailout has not been well received as calls for private sector participation of Eskom are on the rise. The Minerals Council SA has criticised the debt-relief package, arguing the money could be better spent providing essential health services, and education for South Africans.
Bongani Motsa, a senior economist at the Council, has called for privatisation to happen as fast as possible. Motsa says that the government and South Africa ‘should not be scared of privatisation’.
President Cyril Ramaphosa has also announced changes to policy to enable private investors to build their own power plants with a generating capacity of 100MW without licensing. The private sector has yet to see these changes come into play. The private sector does have an appetite but despite intentions by government to open the energy sector to privatisation, necessary policy changes and regulations have failed to be finalised.
Despite these policy changes, the ruling party has long been resistant to privatising Eskom. Minister Gwede Mantashe, in a recent interview on Talk Radio 702, has tried to shift the blame away from the ruling party. When Eskom warned in 2007 about the end of the electricity surplus, the state delayed building necessary infrastructure and the state banked on the private sector. Mantashe blames the private sector for not ‘taking interest.’
The National Treasury, Department of Public Enterprises, and Eskom will be pursing private sector participation to end the energy crisis. This recent pursuit echoes a de facto participation, or privatisation. Privatising Eskom is a dramatic shift away from the ruling party’s ideology.
With promises to swiftly end load-shedding falling through and the ruling party shifting blame for the power crisis, the question arises whether policy changes and channels for private sector participation will manifest?
Private sector participation remains the only way to resolve the crisis. Policy promises and a new ministerial portfolio dedicated solely to the energy crisis have yet to create the necessary changes to meaningfully pave the way for the private sector.
At this stage, South Africans have no choice but to brace for ongoing load-shedding until the ruling party finally makes actionable progress to end the power crisis, or citizens and businesses implement their own solutions as far as they are able.
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