Conversations with Eskom

Understanding the electricity crisis

I am currently continuing with my series on Eskom and the electricity supply problem in South Africa. Eventually I will give a writeup on the solution, but briefly my sense is that South Africans are too quick to blame corruption as the only cause for Eskom’s Woes. That is not to say that State Capture didn’t occur or that André DeRuyter wasn’t wrong that “you cannot steal the sun”, but the issue is much broader and in my view and comes downs to a lack of institutional knowledge, political interference and engineers not being in charge of the utility. In addition South Africa set unrealistic emissions reductions goals at international forums that we couldn’t possible meet.

I personally also put a lot of blame on the policy framework that in my view encourages underperformance and amounts to systemic sabotage. The Eskom that worked before NERSA came into being, following the 1998 white paper on privatization was entirely different than the Eskom that came afterwards. Engineers systematically lost control over the key decision making and revenue collection and as is always with political interference, the least qualified and least knowledgeable people rose to the top.

The policies amount in my view to what was imposed on Russia in the 1990s by the clever “Harvard Boys”, but South Africa didn’t take the advice of shady Bill Clinton advisors, rather we did it to ourselves.

Eskom can be fixed within a short period of time, 18months to 3 years if the government appoints competent people and focuses on adding capacity to the grid, there is no need for a dogmatic debate between private or public ownership, its simply about fixing what is broken.

There are signs that they are doing so if the Minister of Electricity and Energy’s recent pronouncements are anything to go by. But as with all politics, it remains to be seen if words turn into action.

Essentially South Africans should remember two figures, to exit load shedding. To quite Phase4, we need 4GW of power on the grid, and to achieve 5% GDP growth we need around 11GW-15GW of power. But the latter predicates on water being available for industrialization.

The solution seems pretty straight forward to me.

Fix what is broken before we play around. My advise is to the Minister of Electricity is very straight forward, and very controversial for Europeans and North Americans, but please burn more coal.

I am posting my conversations below with the following people that helped me understand the problem.

• Jacob Maroga (Former Eskom CEO),

• Frans Cronje (social research foundation),

• Anthony Turton (SAs water specialist),

• Rob Jeffrey (economist who ran a construction company and finished his PhD remarkable at the age of 80),

• Crown Prince Adil Nchabeleng of the Bapedi people who are experts in the coal mining industry,

• Dumo Denga, analyst on the role of NERSA,

• Princess Mthombeni from Africa4Nuclear

See also my two conversations on this topic, in English with Robert Bryce and Afrikaans with Izak from Nuuspod.

There are other more knowledgeable people who helped me in private to understand it. I would like to thank them too and I hope that this material can help South Africans or those abroad who are deeply concerned understand the situation.

Kind Regards

Hügo