The Eskom crisis can be solved. An open letter to David Mabuza

12 December 2020

Dear Deputy President Mabuza:

We’ve been down this road before...

The announcement that the country would again be plunged into stage 2 loadshedding last night comes as no surprise. If anything, the surprise is that Eskom managed to last as long as it did without resorting to rolling blackouts.

Just a year ago, South Africa was left in the dark for days, as Eskom implemented Stage 6 loadshedding. At the time, President Ramaphosa promised unprecedented reforms to the electricity supply and distribution model. The changes thus far have been minor, and have done little to open up the grid.

The President spoke during those dark days of emergency power procurement, and reiterated it at the State of the Nation address. But to date, we have seen nothing. Not a single megawatt of emergency power has been procured, and now we sit in the dark again.

Demand today is more than 6000 MW lower than it was 5 years ago. More generation capacity has been brought online (Medupi and Khusile) and new IPP projects are being brought into operation weekly.

So what’s going wrong? The answers are simple:

Eskom is behind on its plant maintenance, it cannot properly plan, manage or procure new generation and its Energy Availability Factor is dropping weekly (currently it is just above 60%, versus an IRP estimate of 80%)!

The Minister of Energy, Gwede Mantashe, is ideologically and fundamentally opposed to an open, competitive and transformed grid, and a truly independent transmission and system market operator. He also appears to be reluctant to implement the Renewable Energy Independent Power Producers (REIPP) procurement programme, as evidenced by his failure to open bid window 5.

There is no real incentive for consumers to reduce demand or become more self-sufficient.

The South African electricity regulatory environment is still stuck in the 1980s, in a world that is changing at breakneck speed.

The bureaucratic red tape for municipalities to procure their own power has not been eased, despite the amendments to schedule 2 of the Electricity Regulation Act.

Essentially, Deputy President, your government is the handbrake on electricity security and investment in South Africa. The solutions are readily available:

Open the grid. Divorce it completely from Eskom, and allow IPPs to sell directly without having to go through what is essentially a competitor. Make it a public-private partnership, as the DA proposed in its Independent Electricity Market Operator Bill, which the ANC rejected “with contempt”.

Open Bid Window 5 for renewable IPPs. In fact, open a new bid window every year, in order to meet the commitments made in the IRP.

Make it easier for municipalities to procure power directly from independent power producers.

Incentivise South African businesses and consumers to install solar photovoltaic panels and thereby ease the burden on the grid.

Ease the regulatory environment for small scale generation (less than 20MW) and make it easier for businesses who wish to generate for own use.

Industry experts agree that these are the reforms needed to ensure a reliable supply of electricity. But the Minister of Energy isn’t listening. So isn’t it time to get rid of him?

Deputy President, we cannot afford to hamstring our economy a day longer. South Africa requires a reliable, affordable and well-maintained electricity supply. What we have right now doesn’t cut it. You have an obligation, as the Leader of Government Business, to actively address this issue.

Sincerely,

Kevin Mileham DA Shadow Minister of Energy

Issued by Kevin Mileham, DA Shadow Minister of Energy, 12 December 2020