The electricity minister’s attack on Komati signals a new phase in the war for our energy future. And so far, nobody has connected the dots.
His comments, disingenuous as they are, signal the opening public salvo in what promises to be a fierce battle over our plans for the just energy transition, with the future of Camden, Grootvlei and Hendrina — the three power stations that will be gradually shut down over the four years to 2028 — now in play. Like Komati, the life of these power stations cannot be extended, they cannot be made environmentally compliant, and their operating costs are ballooning as maintenance and coal become ever more expensive. But there are political mouths to feed in the coal value chain, though more of that later.
As it transpires, Eskom rather presciently commissioned Urban-Econ Development Economists to conduct a thorough 272-page socioeconomic impact study into the Komati closure. The study revealed the obvious major negative impacts without mitigation but more importantly spent considerable time and resources focusing on what could be achieved with targeted planned transition interventions.
Shutdown without mitigation would be a disaster. Nearly 800 jobs previously supported by the operations of Komati at risk. And roughly R1.71bn (in 2020 prices) in national GDP lost, with the economies of Steve Tshwete Local Municipality and Mpumalanga declining by 0.7% and 0.1%, respectively, relative to the 2020 baseline. And a 0.3% decline in provincial employment relative to 2020.
Importantly, these figures also provided a benchmark for the development of mitigation measures included in the implementation plan for Komati and detail the level of due diligence and care with which the programme was approached. Far from being led by the nose of those terrible Western funders (Komati had zilch to do with the Just Energy Transition Investment Plan by the way but don’t let the facts spoil the narrative) here is a chance to envision a brave new world.
If the Komati repurposing is successful, the mitigation strategy outlined in the study would see more than R7bn invested in the local economy to support its transition. Once operational, these projects could contribute about R870m to GDP annually. Also 8,700 temporary jobs during construction, while 2,150 sustainable jobs could be created once all the projects are operational.
Komati’s last operating unit was a measly 120MW, yet it bled money like a sieve. I’m told the cost of generating power at Komati was far and away the most expensive in the coal fleet in terms of rand/MWh and was fast approaching that of generating from diesel.
The pressure vessels had reached the end of their lives. Running them had become a suicide mission. It was simply not possible to operate the plant legally and in compliance without embarking on a very costly overhaul. Former Eskom CEO André de Ruyter refused (as did the acting head of generation, Thomas Conradie) to operate the plant in noncompliance, and it was therefore shut down. But still Eskom pushed Komati until the end of October 2022, taking it right to the edge, dancing with disaster.
Eskom could’ve washed its hands clean, walked away without a care, legalities on their side. But no, it chose the harder path, begging for financing from the World Bank, which couldn’t open its treasury doors fast enough, according to De Ruyter in his book Truth to Power.
Speaking of the 39% unemployment in the area, hell, the status quo was already a rotten mess. Nothing was working near Komati, so to blame the community’s anger on this project is what politicians will do a year out from an election in which they are staring down defeat.
And for all those who haven’t seen Komati with their own eyes, let me tell you, it’s a relic from another age. The equipment’s been picked clean, scavenged for other plants, and half the parts are so obsolete they belong in a museum.
What should prick our noses more than the bovine excrement being spewed forth by a minister of state is the smell emanating from elsewhere up on high.
Deputy president Paul Mashatile slid into the office without too much known about him apart from his days at Blue IQ in Gauteng and the stories of his friendships with shady characters from his Alex days.
But thanks to the excellent sleuthing by News24 we now know that he maintains a lifestyle of the Atlantic seaboard nouveau riche black diamond, champagne-and-whiskey-slugging, model-bedding type, thanks to wealthy friends with their tendrils in tenders linked to the very state he aspires to lead, one day, maybe sooner than some expect.
One of the deputy president’s friends, Ndavhe Mareda, is in the coal supply business to Eskom. Mareda’s company, Black Royalty Minerals, recently bought the previously Gupta-owned Koornfontein Mine and secured a coal supply deal with Eskom earlier this year.
The same Koornfontein that was awarded an irregular R7bn tender extension to supply Komati by disgraced criminally charged former Eskom CEO Matshela Koko back in August 2016. Who stands to benefit if Komati’s boilers fire up again?
The thing is we cannot go around pretending that anything has really changed inside Eskom or the governing party since grand corruption was detailed by the Zondo commission.
As De Ruyter reveals in his book, on the morning he was due to meet the World Bank officials in Washington DC in September 2022, he received a series of urgent WhatsApp messages from Ayanda Dlodlo. The former cabinet minister was now the bank’s executive director for Africa and a close friend of Gwede Mantashe, and also a proponent of clean coal technology.
She raised the issue of clean coal at that meeting which De Ruyter quickly shot down. “The price we pay currently for generating power with ‘dirty coal’ is already higher than that of renewable energy. With clean coal, it would be prohibitive,” he wrote.
It’s increasingly clear that De Ruyter was booted for trying to clean Eskom up by weeding out corruption and weaning the state-owned enterprise (SOE) off coal. And the most obvious logical answer to Sputla’s outburst over Komati is that one of Dde Ruyter’s key projects in the Just Energy Transition is being set up as a straw man to beat so that the parasites can insert their tendrils once again into the rotting corpse of the state.
Political inaction has had already laid waste to our health and environment. The country is dotted with dozens of abandoned settlements and mines, leaving environmental risks and unreclaimed wastelands behind. The only time the ANC government feigns care for a community is when a cadre behind the scenes stands to benefit financially.
I expect the just energy transition plans for Camden, Hendrina and Grootvlei to come under fire next.
• Avery, a financial journalist and broadcaster, produces BDTV’s ‘Business Watch’. Contact him at badger@businesslive.co.za.
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