Australia and the World Past and Present

South Africa has been experiencing severe energy shortages since 2007.

When it began, Thabo Mbeki (President at the time) was into his second term.

South Africa has a state-owned body that is responsible for energy production – Eskom.

Some say at the core of the problem is that there simply isn’t enough supply to meet the demand and not enough power is being produced.

Others suggest that corruption or poor management plays a role in the crisis.

There has been discussion for a while now on the privatisation of the energy production. The 1998 White Paper on Energy Policy stated:

“The state should establish a clear difference between its primary role as a policy making and regulatory entity of the energy sector, and its secondary role as a facilitator in the supply of energy services.” (page 3)

Between the early 1960s and the mid-1990s, 15 power stations had been commissioned.

Today, many of the country’s power stations are either at the end of their life or are approaching it.

South Africa is largely dependent on coal for its energy needs with coal making up more than 80 percent of the energy mix.

The country is in the process of transitioning from a reliance on coal towards a greater proportion of renewable energy sources.

Demand has outstripped supply ever since 2007.

While experiencing periods of load-shedding, South Africa still exports electricity to other countries.

The Majuba power plant suffered a major incident in November 2014, creating a load-shedding event. This plant provides around 10% of the country’s total capacity and so it had a large impact.

Again, from late 2019 to March 2020, there was load-shedding across the country.

In 2021, no fewer that eight power stations had problems with production.

In September 2022, the country was in dire straits with Eskom only able to produce around 50% of its capacity.

By February 2023, CEO Andre de Ruyter had stepped down. He sat down for an interview with Annika Larson in which he talked about his time at Eskom.

He estimated that around a billion Rand was stolen from Eskom each month.

He alleged that at all levels, there was resistance to bringing in controls and conducting investigations.

He suggested that at least four criminal organisations had established themselves inside Eskom.

He outlined how some of this sabotage works. He said a cleaner, who is not earning a lot of money, may be paid a small sum to sabotage a gear box. This leads to another person (on a maintenance contract) being called to more incidents and taking more money.

In response, Eskom had security cameras put in place which utilised artificial intelligence. These cameras attempted to detect when people were engaging in suspicious activity, such as loitering in sensitive locations.

de Ruyter was said that the delay in the energy transition was a threat to South Africa’s manufacturing industries and economy. He said that the had spoken to senior peole in large manufacturing and mining companies who wanted to be able to access ‘Green Energy’. Many governments around the world now want to see that products are made using ‘Green Energy’ and if they are not, a carbon border tax is applied to products entering the jurisdiction. Some large South African manufacturers are concerned that they will lose market share.

Eskom uses a lot of water. de Ruyter predicts that if Eskom moved retire many of its coal-fired power stations, 40 billion litres of water each year would return to the Vaal water system. He says that this would provide 200 million people with 220 litres per person per day. In this way, it might be argued that the energy and water crises in South Africa are linked.

de Ruyter also alledged that a senior ANC politican was implicated in corruption at Eskom. However, he did not give a name for this member of parliament.

He related that one Eskom buyer was having Eskom pay for kneepads. Normally this kind of equipment would cost around 320 Rand a pair while Eskom was paying 80,000 Rand a pair.

Some South African MPs have said that de Ruyter’s claims were unsubstantiated and questioned why he hadn’t raised the matter within parliament.

Eskom’s credit rating was downgraded by Standard and Poor in 2016 which makes is harder for the utility to raise loans and service them. Significant investment is needed now and harder loan conditions will have an effect on Eskom’s ability to invest in new plant.

South Africa is facing many challenges with its power generation. Time will tell whether the the country can improve the reliability of its electricity system.