Eskom’s inherent weaknesses must be dealt with – Ramaphosa

The inherent weaknesses at Eskom need to be dealt with by implementing the country’s Energy Action Plan (EAP), which will be accelerated by having appointed a new CEO at the utility and several other key appointments. 

This is feedback from President Cyril Ramaphosa, who lamented Eskom’s poor performance during an interview with Newzroom Afrika on the sidelines of the COP 28 conference in Dubai. 

“We need to deal with the weaknesses inherent in Eskom, and we are making progress,” Ramaphosa said. 

The government remains committed to implementing the EAP and creating a competitive electricity market. 

“We are going to continue with all the actions we need to take to restructure Eskom into three entities.”

The separation of Eskom into three entities began 25 years ago, with a White Paper on energy in 1998 that outlined the separation of the utility into a transmission, generation, and distribution division. 

The process of creating a separate transmission company began in 2000, with a Bill outlining the creation of such a company being tabled in Parliament in 2014. 

Ramaphosa announced the unbundling of Eskom into three separate entities during his State of the Nation Address in 2019. However, the creation of a separate transmission company has been hit by numerous delays. 

Ramaphosa said the appointment of a new Eskom CEO would accelerate this process. 

“With regard to the appointment of people at Eskom, that is going to happen, and it is not only the CEO that must be appointed. There are a number of other people who must be put in key positions,” he said. 

Since the interview, Eskom has appointed Dan Marokane as the utility’s new CEO earlier this month.

However, it is unlikely that a new CEO will be able to accelerate the implementation of a policy that has been around for 25 years. 

Energy analyst Chris Yelland told Newzroom Afrika, following Ramaphosa’s interview, that the government has failed to implement South Africa’s energy policy. 

Yelland referred to the Department of Minerals and Energy White Paper on the Energy Policy of the Republic of South Africa, published in 1998.

It provided details about the implementation, monitoring, and evaluation to meet the country’s electricity needs.

The White Paper famously warned that unless the government acted, Eskom’s generation capacity surplus would be fully utilised by about 2007.

The government did not act, and by 2007, the electricity demand exceeded supply, forcing Eskom to implement load-shedding to prevent a national blackout.

Eskom’s performance since 2007 has deteriorated rapidly, with South Africa experiencing more load-shedding than ever before, with stage 6 power cuts occurring regularly in 2023.

Yelland said the white paper highlighted the need to unbundle Eskom, create an electricity market, and add more generation capacity to the grid from the private sector. 

“It is 25 years later, and we are still talking about the same things, including Eskom’s unbundling, an electricity market, and the private sector’s involvement in generation,” he said.

“The government has failed to implement its own policies over the last 25 years. It failed to do what the white paper said.”

He added that even when the government decided to add new generation capacity through the Medupi and Kusile power stations, it was marred by delays.

“These power stations are still not completed, and there have been tremendous cost overruns,” Yelland said.