The all from the ANC and government – also all SOE’s. Public Enterprises Minister Pravin Gordhan should be investigated following remarks by Deputy President David Mabuza that he, along with the Eskom board, misled President Cyril Ramaphosa about the power utility’s load shedding debacle. This call was made by the legal think tank and lobby group Insika Economic Movement, who have called on government to probe the matter further.
WAR ROOM – ESKOM
Statement made on 29 July 2015 – South African National Energy Association’s (SANEA’s) Johannesburg lecture.
On 28 July 2015 the deputy director general in the Department of Performance Monitoring and Evaluation in the Presidency, Rudi Dicks, said that the War Room, which is presided over by the country’s vice president, Cyril Ramaphosa, is based on a concept where a deliberate focus is placed on the problem at hand. In war-time this would be the defence of the nation, but at present it is the critical shortage of electricity generation in the country.
The War Room consists of an inter-ministerial committee which is divided into strategic and technical groups. Both groups are chaired by the relevant minister (the minister of public enterprises) and has members from public enterprises, energy, national treasury, Eskom, mineral resources, planning, monitoring and evaluation, cooperative governance and economic development. It meets each Friday morning and invites various stakeholders to make representation depending on the topic being discussed at that particular meeting. The War Room committee is chaired by Cyril Ramaphosa.
Findings and recommendations
Dicks said that the War Room has calculated that planned load shedding costs the country between R9 and R15/kWh, while unplanned load shedding can cost as much as R65/kWh depending on the industry involved. The actual cost of load shedding to the economy is believed to be in the region of R8 to R11-billion, which is significantly more than the foreign exchange the smelters bring in. These figures appear to support the concept of closing the smelters until it was suggested that the steady load the smelters place upon the grid actually helps keep the frequency under control.
Although the cost of electricity generated by running the open-cycle gas turbines (OCGTs) is almost eight times more than that generated by coal-fired power stations, it is still less than half the cost of planned load shedding to the economy. For this reason it makes sense to keep the OCGTs, which were designed as “peakers”, operating in base-load mode.
Dicks said that the repairs needed at the Majuba (collapsed silo) and at Duhva (damaged boiler) power stations will take years to complete and will be very costly. Engineers have applied interim interventions to improve the output of these two power stations in the short term.
The idea of recommissioning old power stations – such as Ingagane (which was decommissioned in 1994) and Vierfontein (which was decommissioned in 1990) – are being considered. Another complication in the matter is the lack of sufficient people with adequate skills. Eskom wants to import skilled artisans but is having difficulty with the country’s immigration laws.
One suggestion is to explore the use of liquid natural gas (LNG) or methane gas-fuelled fuel-cells to generate electricity. This will require support from gas suppliers as is available in certain parts of Johannesburg. Another suggestion is an increase in the use of renewable energy with battery back-up, which is said to be cheaper per kWh than load shedding.
On 20 March 2015 a meeting took place, Ramaphosa met with members of Business Leadership South Africa (BLSA) at the Union Buildings on Friday to brief them on interventions being taken to turnaround Eskom, which had been thrown into an even deeper crisis a week earlier by a board decision to suspend CEO Tshediso Matona and three other senior executives.
The Union Buildings meeting was attended by various Ministers and technical experts associated with the war room, as well as members of Ramaphosa’s Eskom Advisory Panel, which included Professor Anton Eberhard, Dolly Mokgatle, Sy Gourah, Smunda Mokoena, Derick Elbrecht and Bobby Godsell.
It was seeking to support the utility in signing extensions, before their expiry on March 31, to existing cogeneration deals for about 800 MW, while guiding government in its issuance of a tender for a further 800 MW of near-term cogeneration capacity.
There were also medium- and longer-term objectives, as outlined in Cabinet’s five-point plan, dealing with the galvanising of near-term supply- and demand-side projects and the transitioning of the diesel-sapping plants in the Western Cape to gas.
After consultation with senior officials at the power utility, Ramaphosa promised South Africans that Eskom would keep the lights on until at least January 10 But this did not materialise, as load shedding resumed a week earlier. Speaking in Kimberley, Mabuza told journalists that the president had been told that there would be no load shedding during the festive season until January 10, but load shedding returned earlier than the promised date. The deputy president said this should be considered to be misleading the president. Mabuza’s comments have touched a raw nerve with Insika with the movement calling for ‘Gordhan to be dealt with’.
“We are very concerned about the state of SOE’s (state owned enterprises) in the country, not only because they have become a pit for our economy but because they have become the ground to settle political scores. We would like to register that we don’t believe that the Eskom war room is a solution to Eskom’s technical and governance challenges. We call for an investigation and divisive action to be taken against those who have lied to the president and the country,” the lobby group said.
Mabuza, who was doing a walkabout at Diamond Pavilion Mall in Kimberley ahead of the ANC’s birthday celebrations on Saturday, said he would meet with the newly appointed Eskom group chief executive, André de Ruyter, in the new week.
“From the day we went to Eskom with the president, I insisted that the problem at Eskom is maintenance of the power stations, it is very important. You can’t say there won’t be any load shedding if there’s no effective maintenance of these power generation plants. “So the problem at Eskom is maintenance. The president was misled,” said Mabuza.
Dr Sihle Sibiya, president of the Insika lobby group, said they would be meeting other organisations and stakeholders next week to discuss the crisis at Eskom. “It’s clear that something very sinister has been going on at Eskom and Gordhan must be made to account,” Sibiya said.
It took 25 years to say that?
PRAVIN GORDHAN ABOUT ESKOM “FUTURE”
On October 29 2019 minister of public enterprises Pravin Gordhan released details of how the government is planning to fix Eskom and turn the state-owned enterprise around. Sporadic load-shedding across South Africa has sparked outrage over the management of the electricity giant.
Nov.06 — South Africa President Cyril Ramaphosa discusses the nation’s commitment to Eskom Holdings SOC Ltd. as he says the entity “is important to the life of our economy.” He speaks with Bloomberg’s Manus Cranny at the South African Investment summit.
Public enterprises minister Pravin Gordhan has announced the dismantling of Eskom’s monopoly, which will see its distribution and transmission divisions being separated by March 31 2020.
Gordhan on Tuesday presented journalists with a much-awaited special paper outlining the government’s plan for the power utility for the next decade.
He announced that Eskom’s transmission component, responsible for carrying power to different parts of the country, would be separated and would function as a subsidiary of Eskom Holdings.
Gordhan explained that transmission and generation will happen in a context where they will be subsidiaries of the company.
There are about 6,000 people working in transmission who are responsible for carrying about 45,000km of lines to ensure electricity is distributed throughout the country.
Transmission is responsible for looking after this infrastructure [the cables] and is also a systems operator, meaning these are the people that monitor how much power is demanded at any point in time and how much power is available from the different generation sources.
It will now have a buying component which from day to day will decide how much energy it will buy from Eskom generation, from renewable sources, and from the private sector.
This is one of the concrete plans Gordhan announced. He also proposed a controversial cluster system in which South Africa’s 16 coal-fired power stations would be organised into three clusters to compete among themselves so that consumers benefit from the best price.
Gordhan said as a result of the lack of competition, South Africans did not get the most effective pricing coming out of the generation side. So the government is considering the creation of three clusters of power plants – with each cluster acting as a business and that business would be required to produce power as cost-effectively as possible, not only for consumers to get the cheapest electricity but to promote internal competition from generation facilities in different power stations.
This formula has been good for business and the consumer and has led to better efficiencies in the generating process in other parts of the world.
The plan was informed by the recently approved Integrated Resource Plan. “This is the beginning of a process, this is not the entirety of the process,” he said.
He warned that the process would not be as easy as changing a tyre or bolting on a boiler.
Gordhan would not say how the government was going to deal with Eskom’s debt burden of R450bn, saying finance minister Tito Mboweni would speak about this at his midterm budget policy statement on Wednesday.
Gordhan lamented the culture of non-payment, saying it was “unacceptable” in a democracy and that people should pay or face the consequences of not paying. “We taught you to pay taxes.”
He noted that state capture had resulted in systemic damage at Eskom. “This is not about someone who stole a few millions and ran off to an island – it’s systemic,” he said but added that state capture could not be blamed for everything.
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