The possibility of Eskom being moved from the control of the department of public enterprises to the department of mineral resources and energy has received the thumbs down from critics.
The possibility is based on policy discussions that took place at the ANC’s national conference earlier this week. The proposal has not been adopted by delegates because the conference was adjourned and will reconvene in hybrid form on January 5 when proposals emerging from the various policy commissions will be debated by delegates.
“Delegates were saying can we ensure that state-owned entities are put into the line department for policy and co-ordination,” said the head of the party’s economic transformation committee, Mmamoloko Kubayi.
“Delegates actually want us to move the entities from the [public enterprises department] to the line departments,” Kubayi told Business Day.
Both energy analyst Chris Yelland and DA mineral resources and energy spokesperson Kevin Mileham don’t believe the minerals and energy department DMRE under Gwede Mantashe has the capacity to manage a utility of the magnitude such as Eskom which is faced with huge challenges in keeping the lights on.
Mantashe is also criticised for putting the brakes on the rollout of renewable energy and for his commitment to retain coal-fired power stations for as long as possible. This would jeopardise SA’s ability to achieve its nationally determined contributions to reduce greenhouse gas emissions aimed at slowing down climate change. It would also get in the way of SA’s achievement of a just transition away from coal generated energy.
Yelland of EE Business Intelligence noted that there was a conflict between the interests of the energy sector and the coal sector which was a major exporter for SA. Having Mantashe in control of both just compounded the conflict between the need for clean energy and the interests of the coal mining sector, he said.
He said there had been ongoing talk about moving SOEs to their line departments for a long time but believed this was a misguided idea because of the conflict of interest and because the department did not have the required capacity. “They are deeply stretched,” he said.
“If you look at the capacity within the department, I think it is very limited. I don’t think they are ready to take on Eskom. I think they have many issues to deal with — for example, having an integrated energy plan, an updated integrated resource plan for electricity and a gas master plan. None of these things is in place. The department also has to deal with the crisis in the liquid-fuels industry.”
Mileham said the department had not covered itself in glory so far in the way it is managing SA’s electricity crisis. “I don’t think they have the skills to manage an entity the size of Eskom.”
For Eskom to have the space to undertake vital maintenance work the department needed to build up additional generation capacity outside Eskom but it was not doing this to the extent required. Nor was the department providing the necessary leadership in an expansion of the grid to provide offtake capacity for the energy generated elsewhere. It was not prepared to consider anything outside the current unrealistic integrated resource plan which dates back to 2019.
“Moving Eskom under Mantashe will not be moving Eskom in the right direction,” Mileham said, because of his coal bias, his ideological perspective and because of his unwillingness to accept any view other than his own. “He is not forward-thinking enough or visionary enough to solve SA’s electricity crisis. He is not providing the strategic leadership required.”
A new electricity road map for the country in an updated integrated resource plan and a minister committed to implementing it was critically needed. Also, the independent power producer procurement programmes needed to be rolled out with speed.
Mileham noted that many of the entities which presently fall under Mantashe had problems, namely the Central Energy Fund, Strategic Fuel Fund, PetroSA, Mintek, Nuclear Energy Corporation of SA and the National Energy Regulator of SA.
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