Eskom faces its biggest challenge yet

Eskom has had to shift focus in recent months towards dealing with significant issues throughout South Africa’s electricity distribution infrastructure, which is the main driver behind load reduction.

While the impact on the country’s economy is not as severe as that of load-shedding, it is much more difficult to address as it concerns nearly every community in the country, with over 200 problem areas.

In the case of load-shedding, the utility could focus on its 14 power stations and improving their performance.

Furthermore, municipalities manage a significant share of South Africa’s distribution infrastructure, making their mismanagement a major problem in addressing load reduction.

This is feedback from Electricity Minister Kgosientsho Ramokgopa, who outlined what makes addressing the deterioration of South Africa’s distribution infrastructure so difficult.

Ramokgopa said the fundamental issue is that distribution infrastructure has not kept up with the growth in demand for electricity across the country.

This has largely been driven by the proliferation of informal settlements in parts of South African cities and rural areas, creating greater demand that was not planned for.

“It is a failure at the level of Eskom and municipalities to provide sufficient infrastructure and capacity to accommodate the load growth in particular areas,” Ramokgopa told Newzroom Afrika.

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

Ramokgopa said that load reduction has become the key focus of his ministry after Eskom’s performance has greatly improved and load-shedding has been significantly reduced.

“We have resolved the monster of load-shedding, which was the challenge of matching aggregate capacity with aggregate demand,” Ramokgopa said.

The minister and the utility have now moved to focus their attention on downstream issues affecting the delivery of electricity to households and businesses.

“The challenge with load reduction is its geographic dispersion. You find it in almost every community. From one community to another, we have to resolve those challenges,” he said.

“With load-shedding, you are really dealing with 14 power stations, and you could concentrate your efforts there. Now, it is over 200 settlements that we need to attend to.”

Municipal collapse 

A significant threat to resolving the issue of load reduction is the mismanagement of local municipalities, which are responsible for a substantial share of South Africa’s distribution infrastructure. 

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. 

Thus, the problem and its solution are not completely within Eskom’s hands, as they require buy-in from municipalities across the country. 

The role of municipal governments includes maintaining infrastructure, providing new connections, and setting minimum service levels. 

However, many of them fail in these duties and struggle to deliver 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 maintain their infrastructure adequately.

This results in load reduction across the country, with local infrastructure unable to handle the demand placed on it. 

The challenge of upgrading and expanding South Africa’s distribution infrastructure is further complicated by municipalities’ deteriorating finances. 

Many of them are now unable to invest in infrastructure maintenance and upgrades after decades of mismanagement have left them without enough money. 

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, it stated 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.