NUM response to President Cyril Ramaphosa address on electricity crisis in the country
26 July 2022
The National Union of Mineworkers (NUM) has noted the delivery of the energy plan by President Cyril Ramaphosa. From the address, the NUM cannot help but conclude that the current administration is in a rush to facilitate the privatization of ESKOM. The address is anchored on three pillars which are fixing EEKOM and improving the performance of the existing fleets of ESKOM power plants, to accelerate the procurement of new capacity from renewables, gas, and battery storage, and to accelerate greater private investment in generation capacity.
Let us dissect the above three pillars as outlined by the President. The first pillar in resolving the current energy crisis according to the energy plan is improving the existing fleets of ESKOM power plants by improving maintenance. The reality is that ESKOM and the government has a plan to decommission 10000 MW to 12000 MW of the existing 46000MW of the coal power plant by 2030.
In addition to the crisis of ESKOM, the fleet is the steam generator project crisis at Koeberg Nuclear Power Station which seems to be giving ESKOM a headache. Koeberg contributes 1800MW to the grid. If the steam generator project is delayed or cancelled, we are running a risk of losing 1800MW. Ironically the president did not address or mitigate this risk. We also have a problem with the performance of our new power stations Medupi and Kusile. The address by the president is not giving details on how the ESKOM new power stations are going to be addressed. From the president’s address, ESKOM is not a priority in resolving the current energy crisis but the private sector. ESKOM is made to fail to pave the way for the addition of private players in the energy sector.
The second pillar that is proposed by the President is to accelerate the procurement of new capacity in the form of renewable energy, gas and battery storage. The president suggests that adding non-dispatchable renewables while closing the dispatchable coal power plant will resolve our energy crisis. We need a base load power plant which produces a reliable electricity supply to support the unreliable renewable energy sources. Germany is a good example that renewables without a stable baseload are not a solution. We need to learn from the experience of Germany. Since the war in Ukraine, the demand and the usage of coal have increased in the world. The export of coal from our country has also increased. In our contribution to the integrated Resource Plan (IRP) as the NUM, we stressed that South Africa needs a well-balanced and scientific energy mix. The NUM believes that the country needs to protect its security of supply. This can only be achieved if the electricity generation, transmission, and generation remain in the hands of the state. Giving the responsibility to build new capacity to the private sector is going to destroy ESKOM. The suggested unbundling of ESKOM into three companies is going to create more energy problems for our country.
Australia restructured their electricity utility to form the Australian Energy Market Operator (AEMO). AEMO is responsible for operating two electricity spot markets through which electricity is traded across the country. A similar structure is proposed in South Africa in the form of an Independent Transmission System and Market Operator (ITSMO). This system created mayhem in Australia leaving the country which has sufficient sources of energy in an energy crisis. South Africa must revert to a vertically structured ESKOM and stop the plan to unbundle ESKOM and the formation of ITSMO.
The third pillar proposed by the President is to accelerate greater private investment in generation capacity. In this pillar, the President is proposing the privatization of the electricity sector. The NUM is vehemently opposed to this neo-liberal approach which will leave our country in a bigger crisis in the future. Many countries that privatized their energy sector are reverting to public ownership. France which already owns 84% of Electricite De France (EDF) is now planning to completely nationalise the utility. They are doing this to protect their security of supply. South Africa must learn from this experience. The world is becoming politically unstable; it will be unrealistic to rely on other countries for our energy supply.
The President also raised issues of sabotage and criminality in the ESKOM power station Thutuka Power Station. The NUM believes that if there is criminality the company must report that criminality to the police. We are aware that some of the employees in Thutuka Power Station have been suspended for an unreasonable period without being charged. The company must stop this form of harassment of our members. We call for their immediate reinstatement.
The NUM is extremely disappointed that 12 NUM members at Thutuka Power Station remain suspended since March 2021 and they have not been formally charged. Thutuka Power Station management must stop these lies about our members being suspended.
The main challenge at ESKOM Power Stations is that the power utility is not buying components, spares and bolts to fix the technical problems in Power Stations. Units are being switched off and our members don't understand why units are being switched off.
President Cyril Ramaphosa visited Thutuka Power Station and only met with the same management that is lying about our members being suspended. We were shocked that President Cyril Ramaphosa last night was praising the same liars for a job well done. NUM members are very angry that President Cyril Ramaphosa only met with the management and never with the workers to hear their view. We urge the President to meet with NUM members in Thutuka so that he has a balanced view than a single narrative from management which is biased.
The scrapping of the license threshold is a direct attack on ESKOM. Most mining companies will start producing electricity for their operations which will leave ESKOM with no big customers. This action will kill ESKOM. ESKOM will not survive without these big customers. The NUM does not support scrapping the regulatory threshold. Our government must go back to the basics of how a developmental state must behave. Our State-Owned Enterprises (SOEs) are well placed to carry out a developmental role in our country. Over-reliance on the private sector will undermine the developmental outlook of our state. It will make electricity unaffordable for poor people. It is also our position that renewable energy be owned by the public and not the private sector.
Issued by William Mabapa, NUM General Secretary, 26 July 2022
