President Cyril Ramaphosa and his party, the ANC, owe wealthy South Africans and businesses a huge vote of thanks. Exactly a year ago, in the first two months of 2023, Eskom’s energy availability factor (EAF) plummeted to below 50%.
We were cast into two horrific months of stage 4 and 6 load-shedding. Stories of collapsing businesses and stinking mortuaries filled us with horror. It was a genuinely scary and terrible time.
The first two weeks of 2024 have seen almost exactly the same EAF at Eskom — a fraction worse in week one at 48.97% (49.19%), and a fraction better in week two at 51.78% (50.79%), according to energy expert Chris Yelland.
Despite this, at 6.34am yesterday morning Eskom tweeted that “due to improved generation capacity, load-shedding will remain suspended until further notice” and went on to say it would communicate further about the week ahead. So, what gives?
Less than six hours later, the utility tweeted again, saying that “whilst the generation performance continues to improve, the heightened focus on planned maintenance and expected increase in electricity demand necessitates the implementation of stage 2 load-shedding from 16:00 today until further notice”.
At 4pm Eskom tweeted a third time, saying “due to lower than anticipated demand and a further slight improvement in generation capacity the suspension of load-shedding will continue until 18:00 today”.
This feels chaotic. It seems unlikely that a “heightened focus on planned maintenance” as a strategic approach to ending the energy crisis was suddenly developed between 6am and midday on yesterday morning. It is important to acknowledge that the utility has routinely had 8,000MW offline for planned maintenance over the holiday period, and continued this habit into the start of the year, but this doesn’t explain the chopping and changing.
Those reliant on Eskom supply (or its municipal retailers) will have noticed that warning times for load-shedding seem to be becoming shorter, and that the utility appears to be changing its plans in a seemingly more chaotic way, as happened yesterday.
For South Africans, this is part of life now — we’ve endured 15 years of load-shedding and there is little reason to anticipate much change before 2028. The sound of Eskom’s notifications on your cellphones announcing changes to load-shedding schedules is no more surprising or less annoying than the call of the hadeda early on a Sunday morning. It’s a backdrop to life, part of the SA soundtrack.
But the rhythm of the utility is changing. It seems less able to rely upon its once-legendary forecasting team, which was for years able to anticipate demand with remarkable accuracy.
In 2021 the cap for private generation licences was raised to 100MW, and by the end of the year the requirement to license was removed altogether and replaced with a simple and (quicker) registration process. Since then, according to the National Energy Regulator of SA, just shy of 6,200MW of private generation capacity was added in SA, the bulk (4,300MW) last year, after the shock and economic carnage of stage 6 outages.
This capacity — six stages of load-shedding when fully utilised — complicates life for a system operator. Because the bulk of it is small-scale solar, those managing the grid are now very much at the mercy of weather, on top of the existing complexities of demand forecasting.
Those with solar installations can rely on Eskom to back them up when the rain comes or it is cloudy for an extended period, but of course they take on none of the system risk or, indeed, the cost of that risk. It is these users that have added strain to Eskom’s ability to plan, and now pay the utility considerably less than they used to for the pleasure.
The upshot is interesting though. With so much solar online and tens of gigawatts in the pipeline, none of which Eskom has any control over in terms of planning, we can expect to see more last-minute changes to load-shedding planning in response to weather conditions and, most interestingly, we may see less load-shedding generally.
Simplistically, this is great. Rich folks and businesses have slapped solar all over their roofs and Eskom can keep the lights on more easily. What’s not to love?
The fact that this greater stability is essentially a function of reduced demand will not please the accountants at Eskom, nor those at the National Treasury, which has recently shouldered a quarter of a trillion rand of its debt, creating a drag on the state’s ability to deliver services to the poor or raise further debt, and constitutes a sovereign risk that comes at a price to all of us.
Equally, it’s reasonable to consider the political implications. Eskom is to be congratulated for its recent surge of planned maintenance. It is, I hope, not an exercise in too much cynicism to wonder whether this will continue into the election campaign and over the election itself.
With all these businesses leaning on their solar power stations, and rich homeowners running their houses from solar inverters and batteries, it would only take Eskom reducing planned maintenance from 8,000MW to 5,000MW to eliminate load-shedding altogether in the short term. You can see the appeal of that for the governing party, which is under electoral pressure because, among other things, of its catastrophic handling of our energy crisis.
Eskom’s new CEO, Dan Marokane, formally starts work on March 1. I wish him the best of luck handling all of this because, unlike the louder grid-tied suburban homesteaders, I understand that we still need Eskom — just a profoundly better version of it.
Eskom is still beset by politics. The Integrated Resource Plan is a political document that plays to favoured sectors. The board is politically appointed. These facts seem to be at the core of so much of the harm that was done during the Zuma administration, and so much of the drift since. As André de Ruyter found out, Eskom cannot fix itself.
All eyes, then, on the party manifestos, which are launching in the coming weeks ahead of an election that could come as soon as May. This weekend Rise Mzansi launched its manifesto. The political start-up headed by one of my predecessors at Business Day, Songezo Zibi, said of the state-owned enterprises that its plan would involve “appointing SOE boards on merit and expertise, not political loyalty.
“Such competent boards will be left alone to appoint CEOs on the same basis. Ministers will no longer have the power to over-rule boards because of political considerations.”
This is so sensible that in SA’s political contest it seems radical.
Time will tell whether wealthy homeowners have created enough cover for the ANC to claim that the lights are on, and therefore that the party is at home in government.
• Parker is Business Day editor-in-chief.
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