Eskom’s leadership made a presentation to media yesterday designed to give an overall picture of the state of things (bad) and the utility’s plans to get us out of the mess (a good effort under the circumstances). However, they didn’t mention the biggest factor in Eskom’s short-term future because they are in no position to do so. It’s Mpumalanga, stupid.
There was some colour to be found in the briefing. Chair Mpho Makwana’s remarks that the board had spent the past 110 days looking “into the engine room” and studying South Africans’ “ways of living”, and references to “engagements” and “alignments” of the “views, fears and aspirations” of South Africans, didn’t sound like the utterances of a man in the midst of an existential crisis.
CEO André De Ruyter looked tired and seemed flat — unsurprising given the recent attempt on his life and his approaching departure date — and outgoing operations boss Jan Oberholzer is clearly in full-on handover mode to his acting replacement, Thomas Conradie. Frankly, both De Ruyter and Oberholzer look like they’re over it.
And yet, in the most appalling circumstances, the executive team and the system operator continue to make plans for our exit from the mess of state capture. Solutions include the long-called-for move to permanent load-shedding for two years, and a plan to introduce too little new capacity over too much time. It’s not their fault, but organising 10GW (if Eskom gets its way) for the end of 2025 isn’t good enough, because so much of that is dependent on the full functioning of Medupi and Kusile, and I’m afraid I am not convinced that will ever be possible.
We’re in this mess in the 2020s because the government interfered with Eskom’s planning in the 1990s. Planning today for 2050 isn’t just some long-distant Western eco-warrior nonsense. It’s critical — ask a South African.
Interestingly, for some guidance about the country’s actual likely journey out of the mess we can look to comments made by the EU’s ambassador to SA, Sandra Kramer, last week. In what I think was supposed to be a positive story about the EU’s willingness to increase its financial assistance to SA’s path away from producing the most carbon-intensive electricity in the G20, I think she may have accidentally said the quiet part out loud — “what we are looking for now is an implementation plan that the government of SA will provide.”
Which is to say that a collection of wealthy countries is waiting to throw billions of dollars at us to help us build a clean energy future, but since October 2021 when the deal was offered our government is so relaxed about everything that we still haven’t told them what we’d like to spend it on. We haven’t told them because we can’t decide, and we can’t decide because the ANC is torn between a pro-coal faction and a “we’d like to be re-elected in 2024” faction.
In reality, Eskom’s future, and the shape of our economy, has long rested on the contested future of Mpumalanga. It is there that the saboteurs and the state capture gangsters have feasted on the coal supply chain to Eskom’s fleet of coal-fired plants. And it is there that coal power must wither if finance for Eskom’s future is to be found. It is the most contested ground in our energy war.
In yesterday’s presentation Oberholzer outlined how Eskom had lost 19 units as “tripped” in one week. It’s important to stop, briefly, and note that this is scandalous, and yet in SA it scarcely blips on the radar.
Much has been said recently about the state of grid capacity and the fact that in other parts of the country new IPPs can’t get onto the grid because of insufficient grid investment over the past 30 years. All true. All infuriating. But one thing Mpumalanga has is grid capacity. What it has not had is what you would call a welcoming environment for renewables and clean procurement.
Mineral resources & energy minister Gwede Mantashe’s apparently imminent departure from the levers of power at Eskom, and presuming Cyril Ramaphosa accepts DD Mabuza’s resignation, seem to suggest the president is tired of lawlessness in the province and the utility, and that he feels the two outgoing leaders were unable to contain it.
Either way, what we are seeing is change, and that does suggest the president is willing to have the fight about coal and renewables, and to take on the criminal elements that have trashed the utility’s generation and logistics capacity over the past decade in Mpumalanga, variously threatened Oberholzer, chased off an acting head of generation and, it would appear, made an attempt to murder the current CEO.
This isn’t exactly the most investable environment, so Ramaphosa knows he has to be able to answer Kramer’s question. He knows the just energy transition deal is probably the simplest — possibly only — path out of this mess that takes into account Eskom’s debt burden, which is already de facto sovereign debt, and he knows above all else that getting the saboteurs out of the coal plants in Mpumalanga is a quick way to ease the load-shedding crisis, make grid capacity available for fast-build, post-coal and energy projects, and ultimately give the ANC anything like a fighting chance in 2024.
Who he asks to do it is the really interesting question.
• Parker is Business Day editor-in-chief.
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