President Cyril Ramaphosa has forgone the pleasures of Davos to deal with the energy crisis at home. Obviously there’s nothing he can actually do, but it’s good to be seen trying. How often has he been caught abroad by some hideous new stage of load-shedding and been obliged to fly home to look as if he’s doing something?
Finance minister Enoch Godongwana is in Davos. Load-shedding, he’s telling anyone who slides past, “will be a thing of the past” in two years. Asked if his National Treasury would be allocating more money to Eskom to buy diesel for its emergency peaking plants, he told Reuters: “I don’t think Eskom has a diesel problem. I think Eskom has got a management problem.”
Laserbrain. Eskom CEO André de Ruyter is out of Eskom by the end of March and neither Godongwana nor Ramaphosa has any idea with whom to replace him. The president and public enterprises minister Pravin Gordhan took nearly three years to replace the interim chair put in place after the late Jabu Mabuza resigned in the wake of 2019 Christmas load-shedding.
The new chair, Mpho Makwana, comes out of the marketing industry. He is also chair of Nedbank. The interim chair before him was Malegapuru Makgoba, an immunologist. Before him was Zola Tsotsi, appointed by Malusi Gigaba on the orders of the Gupta family. After him and before Mabuza, the chair was the late Ben Ngubane, another medical man and one of Jacob Zuma’s go-to board members for whatever it was he needed captured.
So, not much of the engineering expertise everyone now says is essential to fixing Eskom has been on its boards in the past 12 years. The only engineer I’ve seen suggested as a replacement for De Ruyter is Jacob Maroga, Eskom CEO from 2007 to 2009, who was fired by the board (ultimately, by Zuma) and replaced for the next nine months by Makwana, who also became chair.
If people criticise De Ruyter for anything, it’s that he got the politics at Eskom wrong. At Eskom the CEO has to manage the shareholder and understand the enterprise. The board meeting that triggered Maroga’s departure over an apparent disagreement on strategy had a list of 41 things it had asked management to do over the past 18 months and hadn’t been done.
What will probably happen now is that the board will settle on a CEO, make sure everyone from Ramaphosa to the cleaning staff are happy with him or her, and then try to run the operation themselves. It won’t work. I hear the board’s contribution to meetings Ramaphosa had on Monday with various “stakeholders” was dire. They’re undertaking a “review” of load-shedding!
For his part, Ramaphosa tried to tell the business delegation everything we already know about Eskom, perhaps repurposing what he was going to say in Davos. The meeting was virtual, trite, unhappy and inconclusive. It was followed by what was supposed to be an encouraging note from something called the National Energy Crisis Committee of Ministers (Necom), established by Ramaphosa after he announced an emergency 10-point plan last July to end load-shedding (I’ll spare you the undelivered promises).
A Necom statement said they were writing new legislation to fast-track new energy projects but warned that “as Eskom steps up its maintenance programme — as it must do to reduce breakdowns in the future — it has to take more units offline”. So, more load-shedding.
The question is for how long. Even if everything goes right for the ANC, this is not nearly fixed by June 2024, by when elections must happen. That freaks out the party, though the Necom announcement did remind me that the renewable energy bid window 5, which appeared to have largely failed in 2022 when only four out of 25 preferred bidders (tender winners) were in any state to proceed, has now signed up 19 of the 25, though most have not yet secured financing. Necom says the projects will “soon” proceed to construction. We’ll see.
Still, it’s progress. Bid window 6 is in bigger trouble. Only five of 56 submissions were approved (all solar because the wind bids were in the Eastern Cape and Western Cape, where Eskom has no more transmission capacity to take additional load) in December, and there doesn’t seem anywhere else to go. Together, windows 5 and 6, as they stand approved (though not yet all financed), promise a combined 2,600MW instead of their planned 7,800MW.
That 2,600MW is variable load, equivalent to only about 800MW of dispatchable coal-fired baseload. Meanwhile, the lifting of restrictions on private sector generation has more than 100 projects in various early stages of development. They promise 9,000MW of renewable (3,000MW dispatchable) power, but the public will only get what the owners don’t need. There are also two nuclear units at Koeberg to come back possibly this year, 920MW each, roughly one stage of load-shedding per unit, which might help with the election.
Or not. Politicians like Godongwana will tell you load-shedding (not Eskom) will be fixed in two years max. That’s because they’re ignorant or liars and doing the same sums I’ve just described here. The sums are fine. The execution never is. We’ve been load-shedding since 2007. Eskom is still the prisoner of a powerful coal mafia upon which the ANC is financially dependent.
Eskom’s plant is still in a terrible state and Eskom no longer has the technical or management expertise to fix it. Likely outcome? The ANC will still be promising to end load-shedding by the end of the decade.
• Bruce is a former editor of Business Day and the Financial Mail.
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