PETER BRUCE: Let private sector in as De Ruyter tries riding Eskom into the sunset

Now that Eskom’s two big unions, the National Union of Mineworkers (NUM) and the National Union of Metalworkers of SA (Numsa), have accepted Eskom’s generous and probably unaffordable offer of a 7% pay hike, we can probably expect our immediate power crisis to subside a little. But don’t get comfortable.

There are two immediate worries. The first is that yet more damage has been done to a tottering economy, our reputation as an investment destination and, without doubt, to Eskom’s rapidly diminishing capacity to produce electricity. A few days ago indefatigable energy analyst Chris Yelland produced a report that, among its many virtues, contained a graphic showing just how rapidly Eskom’s fleet is failing.

Eskom regularly reports its energy availability factor. For example, in 2017 it started the year with 77% of its installed capacity available. That’s in January — summer, when Eskom does more maintenance. By week 28, which would be around about now, plant availability in 2017 reached a high of 87%.

By 2022 we started off the year with just 58% of capacity available. By week 23, around June 6, it had peaked at 63%. Then NUM and Numsa started their strike, much of it illegal, with no interference from law enforcement. We will not see even those numbers again.

But it isn’t just the strike, though it will have done damage. The fact is CEO André de Ruyter and his management team at Eskom have an impossible job. They can’t save Eskom. They can’t “turn it around”. It is going to die. All we can hope for is that they’re good enough to guide it to a soft landing; that somehow enough private sector power will be on hand to make it not matter when Eskom’s coal fleet draws its last breath.

Eskom will build no more plant. It has no money and nor does the government. The best it can do is stay standing while getting as much renewable power — solar, wind and battery — as possible onto the grid, where it has capacity to take new connections. That is, right now, mainly around Mpumalanga and Limpopo, where its coal jobs are most threatened.

But the government needs to understand its job is merely to facilitate. It does not — dear God, please not — have to build or operate anything

And there’s no point screaming at De Ruyter to do more maintenance. Maintenance requires plant to shut down, not run harder. All the while Eskom’s old plant just gets older. And its new plant behaves like old plant. There’s nowhere to go but renewable and private.

The second worry concerns reports that the ANC national executive discussed the Eskom crisis over the weekend. The ANC NEC is not a body you want involved in solving complex economic problems.

Obviously, our political reality means the government must play a role in building new renewable power generation capacity at warp speed. But it needs to understand its job is merely to facilitate. It does not — dear God, please not — have to build or operate anything.

We have seen at least five substantial energy reports, based on extensive research and experience and from serious-minded and conservative institutions, appear in the first half of this year and they all, without serious variation, recommend a huge and rapid rollout of renewable energy. Most argue for between 5,000MW and 10,000MW, to be built in the next two years. Yelland reminds us that Vietnam installed 9,000MW of renewables in just a year recently.

There is certainly enough money in the private sector to do this. And probably the will as well. What is required from the state, and President Cyril Ramaphosa in particular, is leadership and encouragement, and even incentives to get that two year emergency job done on time. Would it not be wonderful to achieve something together that we all agree is a good thing?

Crazed vagabond

Getting it done means mineral resources & energy minister Gwede Mantashe stands aside and allows a warp speed renewables build to happen. It means trade, industry & competition minister Ebrahim Patel drops local content rules so we get the panels and propellers and batteries up and running and then we can get back to squabbling about the merits of base load and dispatchable power and gas, and the creation of a sustainable local power engineering industry and, for that matter, many other industries as well.

We have to kill load-shedding before we can return to combat about ideas and policies. Until we get rid of load-shedding we are fundamentally uninvestible, a lost cause, a crazed vagabond running up and down the sidelines of a World Investment Cup Final waving frantically to be allowed onto the field.

Sadly, we can be sure investibility was not top of mind when the ANC NEC met. It discussed imposing a state of emergency. But there’s no need for that. Just build extra renewables capacity immediately. Easy, you’d think, but the ANC NEC is a body fundamentally out to serve itself. It wants to stand at the centre of the economy, where it does the most damage.

Ramaphosa’s first instinct was to play politics and instruct Eskom to stop load-shedding poor black people in townships. Like that’ll work. Those people in the townships aren’t fools. They’re just poor. They know whose fault this is. They know the government just needs to get out of the way and let some light (and capital) in.

• Bruce is a former editor of Business Day and the Financial Mail.