Government was warned about energy crisis

In 1998, the government was warned that Eskom’s generation capacity surplus would be fully utilised by about 2007 and that urgent action was needed to prevent a shortfall.

This does not align with former President Thabo Mbeki’s claim that the reason for load-shedding was not a lack of generation capacity.

On Thursday, Mbeki said, “The argument was that Eskom had told the government in 1998 that there must be investment in new generation capacity and infrastructure.”

“The narrative was that the government did not listen, which caused the blackouts in January 2008. That story was false. That story was cooked up.”

He said the true reason for load-shedding in January 2008 was that the people in charge of the power stations did not do what they were supposed to – replenish coal.

“The power stations ran out of coal. It was not because there was no coal in the country. The people inside Eskom decided, ‘let’s shut it down’,” Mbeki said.

However, the facts dispute Mbeki’s version of events and point to government failure as the cause of load-shedding.

In December 1998, the Department of Minerals and Energy under Penuell Maduna wrote, “Eskom’s present generation capacity surplus will be fully utilised by about 2007”.

This warning formed part of a White Paper on the Energy Policy of the Republic of South Africa, which is still available on the department’s website.

The White Paper stated that Eskom was the world’s fourth largest electricity utility, with an installed generating capacity of about 39,000 MW in 1997.

The maximum demand in 1997 was about 28,330 MW. Eskom forecasted that for an assumed demand growth of 4.2%, its generation capacity surplus would run out by about 2007.

“Timely steps will have to be taken to ensure that demand does not exceed available supply capacity and that appropriate strategies, including those with long lead times, are implemented in time,” it said.

“The next decision on supply-side investments will probably have to be taken by the end of 1999 to ensure that the electricity needs of the next decade are met.”

The White Paper from the Department of Minerals and Energy provides proof that the government was warned about the energy crisis.

Even more perplexing about Mbeki’s recent claim was that he admitted in December 2007 that the government was warned about an energy shortage.

He said his government should have heeded pleas by Eskom several years ago to invest more in electricity generation to keep up with the country’s economic growth.

“When Eskom said to the government, ‘We think we must invest more in electricity generation’, we said no, but all you will be doing is just to build excess capacity,” he said in a speech.

“We said, ‘Not now, later’. We were wrong. Eskom was right. We were wrong.”

Former Eskom COO Jan Oberholzer’s feedback

Former Eskom COO Jan Oberholzer also said the government was warned about the looming energy crisis long before it happened.

He said the government did not follow Eskom and the Energy Department’s advice to increase Eskom’s generation capacity, and the result was predictable.

In 2007, South Africa’s electricity demand exceeded supply for the first time, and Eskom was forced to implement load-shedding to prevent a national blackout.

One would have expected the government to learn from its mistakes, but not much has changed fifteen years after the first blackouts hit the country.

Oberholzer told Biznews’ Alec Hogg that South Africa still lacks a comprehensive plan to prevent load-shedding.

“South Africa’s failure to develop a plan to avoid future load-shedding is concerning,” the former Eskom COO said.

He said it is essential for policymakers to accurately predict demand in the short- and long-term, from the next three months to 50 years ahead.

“Understanding the future demand profile and how technological innovations will shape industries is crucial for planning,” he said.

“Without a clear understanding of future needs, it’s impossible to determine the necessary infrastructure requirements.”

He said the country is still facing a future shortfall, and urgent action is needed to address it.

Eskom has 14 coal-fired power plants with an average age of 44 years. Within the next 12 to 15 years, those producing approximately 20,000 MW will reach the end of their operational life.

Oberholzer urged the government to acknowledge their past mistakes and for shareholders and policymakers to take responsibility for their choices.

“Without proper planning and a clear understanding of the future, we cannot ensure a stable energy supply for our country,” he said.

“We need a collective effort and a commitment to developing a comprehensive plan to address these challenges.”