It’s a bad habit, and a cliché. But it seems to take a crisis to prompt government to act in SA, which is why stage 6 load-shedding has seen the president and his ministers seized with the power crisis and swooping in to inspect ailing power stations. If they are truly seized and ready to do what it takes, it can’t be too soon.
But crises also have a habit of generating new ideas. Two particularly inventive ones have emerged over the past week and need interrogating. First, the National Planning Commission (NPC) has proposed the declaration of an “energy emergency” to enable government to override some of the red tape preventing the delivery of new generation capacity.
Second, mineral resources & energy minister Gwede Mantashe has proposed a “second Eskom”, housed in his department, that would build new baseload power stations. According to the Sunday Times, President Cyril Ramaphosa is warming to the idea.
I may be a minority of one, but I think an energy emergency is a terrible idea. It sets a dangerous precedent if the government starts declaring emergencies and suspending established legal processes just because it can’t circumvent its own red tape. Covid-19 may have justified it: the 15-year-old load-shedding problem surely cannot. SA still has searing memories of what can happen when you put emergency powers in the hands of a committee.
But it’s not clear to which problem an emergency would be the solution. The argument seems to be “Gwede”, and the regulatory hurdles his department and the energy regulator that reports to it have put in the way of new private power projects, even after Ramaphosa liberalised licensing last year. There might be a few other departmental roadblocks too.
An emergency would presumably give authority to some sort of national command council to take over and override the regulatory hurdles. There is of course an alternative — which is for the president to use his power to replace obdurate or incompetent ministers or senior officials with better ones, or simply mandate the existing ones to get on with it or else. That a state of emergency is even being considered reflects the political reluctance to do this.
It also risks taking the pressure off to address the source of the problem — the plethora of rules and red tape as well as the obsession with compliance that is paralysing government.
If the legislation about energy generation is dysfunctional, it needs to be changed. If the blind insistence on localisation is deterring investment, including in the new generating capacity SA so urgently needs, it must be reconsidered. That will take time and due parliamentary processes, so is no immediate solution. But using an emergency to suspend the rules just risks perpetuating the problem.
There is of course an alternative — which is for the president to use his power to replace obdurate or incompetent ministers or senior officials with better ones, or simply mandate the existing ones to get on with it or else
Nor is it clear that an emergency would even tackle some of the key constraints to bringing new private power producers on to the grid. That’s evident to some extent in the differences between business’s list of key interventions and the to-do lists proposed by the NPC, and reportedly the presidency.
There is a welcome degree of convergence on measures such as streamlining and speeding up licensing and registration for new power producers, even scrapping some of it. There is convergence too that local content requirements must be suspended, at least temporarily.
But the list from Business Unity SA touches on a whole set of other urgent issues — such as agreeing on the wheeling framework needed so that private power can be transported on national and municipal grids, as well as on “feed-in” tariffs for Eskom to buy power from existing independent generators. Business’s list also points to the whole range of red tape that constrains private investment in energy, as well as the cumbersome public private partnership framework that needs to be fixed.
Nor are the regulatory hurdles even necessarily the hardest to solve — the dysfunctional and bankrupt state of many municipalities is also a key issue given that much of the power generated by new producers would have to be wheeled through municipal networks. And let’s not even start on the transmission grid that needs enormous investment if SA is to take advantage of its rich Northern Cape solar resources.
No worries about being a minority of one on Mantashe’s “second Eskom” idea, which has the cartoonists drawing merrily. What’s interesting about the proposal is that it lays bare what should long have been evident: it’s not that the minister is necessarily a coal junkie. Rather it is that he and some of his colleagues in government and the ANC are deeply uncomfortable about relinquishing control to the private sector. Some of it may be ideology or a distrust of markets and business. Some of it is simply about maintaining empires and control. But it clearly is not just about coal.
Mantashe speaks of a new state-owned company alongside Eskom to build baseload generation capacity. Baseload could be cleaner coal, or gas, or nuclear, or indeed renewable energy with industrial-scale battery storage capacity — he doesn’t seem to specify which. Nor is it just Mantashe. The control thing runs through much of government and state-owned enterprises, bedevilling efforts to attract private sector participation and investment even when government loudly claims to be committed to this.
Some in government want and need to partner with the private sector, to access particularly the money that’s there — but only as long as it’s on government’s own terms. The Ramaphosa administration cannot achieve the private sector participation it claims to want, whether in energy or transport or anywhere else, unless it tackles that discomfort and addresses the divide within.
But, lest we forget, there’s Eskom itself. Almost all of the crisis interventions being proposed are about fast-tracking new power stations, not fixing existing ones. That’s crucial. But at best it’s a 2024 solution, not a 2022 one. Political and policy failure certainly are a big factor in Eskom’s failure, but they are not the only issues. We need to keep the pressure on Eskom itself to improve its shocking performance.
• Joffe is editor-at-large.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.