Eskom’s next crisis is here 

South Africans have been increasingly hit with load reduction due to the country’s ailing distribution infrastructure, with Eskom now shifting its attention to this looming crisis. 

Despite the significant decline in load-shedding, the picture for Eskom is not all rosy, Electricity Minister Kgosientsho Ramokgopa said. 

Speaking at the utility’s State of the System media briefing, Ramokgopa praised Eskom for its work in addressing the load-shedding crisis that gripped South Africa. 

“These men and women have done exceptional work in turning this organisation around. We are exceptionally buoyant about what the immediate future looks like,” Ramokgopa said. 

“But it is not all rosy, and it is not all an Eskom problem. There are problems that are the responsibility of the executive authority that sits in the ministry.” 

Eskom’s efforts to bring load-shedding to an end have opened new fronts for the utility and ministry to address. 

The major new front Eskom and the ministry will have to tackle is load reduction, which has become a substantial problem in South Africa. 

As demand for electricity has increased with population growth and migration, parts of the country have been hit with load reduction or blackouts due to infrastructure failures.

Ramokgopa previously warned that the collapse of distribution infrastructure threatens the utility’s progress on load-shedding. 

Critics have argued that the ongoing reforms in South Africa’s electricity sector are paying little attention to the vital area of distribution infrastructure.

“There are communities in South Africa, around 1.5 million customers of Eskom and more on the municipal side, that are experiencing load reduction,” Ramokgopa said. 

“Load reduction is not load-shedding in another guise. It is an issue downstream from energy generation that is a result of non-technical losses and an overload on the network.” 

This is a relatively more difficult problem to solve than load-shedding, given the dispersed nature of South Africa’s distribution network. 

Ramokgopa previously said that it is far easier to deal with issues at 14 power stations in South Africa rather than hundreds of substations or pieces of equipment across the country that are inadequate. 

Municipal collapse

Much of the deterioration of South Africa’s distribution infrastructure is due to the collapse of local municipalities, which have failed to invest in infrastructure adequately. 

Due to provision obligations in South Africa’s Constitution, municipal governments play a key role in the electricity sector, distributing around 40% of all electricity. 

Municipal governments primarily serve households and small businesses, with the remaining 60% of users being served by Eskom, which caters to large users and municipalities without a network. 

“Load reduction is a failure at the level of Eskom and municipalities to provide sufficient infrastructure and capacity to accommodate load growth in particular areas,” Ramokgopa previously said. 

This has largely been driven by the emergence of informal settlements in parts of South Africa, typically on the edges of cities, that have created unexpected additional demand. 

“We have not kept up with that by renovating and expanding the capacity of distribution infrastructure in parts of South Africa,” Ramokgopa said.

Municipalities, under the current arrangement, are charged with maintaining infrastrucutre, providing new connections, and setting minimum service levels. 

Many of them fail in these duties and struggle to provide reliable electricity services to their constituents. 

In recent years, numerous outages and equipment failures have occurred at this level, exacerbating load shedding, as municipalities lack the funds to adequately maintain their infrastructure.

The Organisation for Economic Cooperation and Development said this problem is complex and cannot be solved by allocating more funds towards infrastructure maintenance or development at the municipal level. 

Rather, the organisation explained that the roles of municipalities and Eskom in electricity distribution must be completely redefined to better serve South African consumers. 

“This requires revising management and funding models of municipalities, including by earmarking electricity revenue for grid investment, and exploring distribution concessions,” the organisation said. 

Energy analyst and managing director of EE Business Intelligence Chris Yelland has referred to the distribution segment as completely dysfunctional. 

Many municipalities are unable to pay Eskom for the electricity it provides, placing it under increasing financial pressure. 

“This points to a completely dysfunctional electricity distribution sector. I do not see sufficient attention given to the reforms needed,” Yelland said.

“This sector really needs more attention now, much more attention because that is where a big crisis is brewing.”