New Eskom CEO will ‘hit the ground running ’— Ramokgopa
The appointment of Dan Marokane as CEO of Eskom will bring some much-needed stability to the state-owned power utility which has been struggling to turn things around and end SA’s crippling power crisis.
Marokane is interim CEO of Tongaat, which has been in business rescue since October 2022. His Eskom appointment was announced on Friday by public enterprises minister Pravin Gordhan.
“Leadership stability is key to the resolution of the energy crisis that is facing us, and we are looking forward to [Marokane’s] contribution to provide impetus to the work we are doing,” electricity minister Kgosientsho Ramokgopa told journalists on Sunday. Eskom has been without a CEO since February, after the early departure of André de Ruyter.
Ramokgopa said Marokane, who was a senior manager at Eskom from 2010 to 2015, has “great knowledge of the institution” and will “hit the ground running”.
“The learning curve is very steep, but for someone who has been in the trenches I think familiarity is going to help.”
Marokane returns to an Eskom that is unlike the one he left in 2015. Load-shedding began in 2008, but 2023 has been the worst year in terms of generation performance, which resulted in SA experiencing more load-shedding than in the previous five years combined.
In a recent presentation to parliament’s portfolio committee for mineral resource & energy, the National Treasury and representatives from the presidency said load-shedding was estimated to have cost SA R224bn in 2020-22, and the cost this year would be much higher.
By the end of September Eskom shed 14,600 gigawatt hours of energy. This was more than the combined total of 12,400 gigawatt hours for the five years from 2018 to 2022.
Despite concerted efforts to improve the performance of Eskom’s generation fleet, including appointing a minister of electricity, bringing in private sector support through the national energy crisis committee, and the announcement of a three-year R254bn debt relief package meant to free up more cash for Eskom to invest in maintenance, its power stations are performing worse now than a year ago.
The average energy availability factor (EAF) for the generation fleet, which measures generation output as a share of total installed capacity, was about 57% in the 2022/23 fiscal year. For the year to date the EAF is standing at an average of 55% still far off from the 60% average that Eskom wants to achieve by end-March.
Improving generation performance will be one of the most urgent tasks Marokane will have to oversee, but there are many other priorities that will require his attention. Some of these are:
DEALING WITH DEBT
Eskom’s debt problems are twofold; the utility faces a debt pile of about R400bn and while the three-year R254bn debt relief plan from the Treasury is supposed to bring this down to a manageable level, growing municipal debt owed to Eskom (about R64bn) poses a threat to the success of the Eskom debt relief plan.
ESKOM UNBUNDLING
Marokane will have to oversee one of the biggest organisational changes in Eskom’s history as the utility is separated into three divisions for generation, transmission, and distribution. Most urgent is setting up the new National Transmission Company which will facilitate the creation of a transparent platform for the competitive trading of electricity in SA. Not only is setting up the transmission company key to attract more private investment in urgently needed generation capacity, it is also needed to attract private investment for the upgrade and expansion of the transmission grid a huge project that will require funding of R390bn to build 14,000km of transmission lines
KOEBERG LIFE EXTENSION
Marokane, who is expected to join Eskom by no later than March will arrive just in time to hear whether the National Nuclear Regulator will approve Eskom’s application to extend the life of Koeberg by 20 more years. If granted, Eskom will still have to complete at least two major maintenance outages for the plant to be allowed to continue running.
JUST TRANSITION AND DECOMMISSIONING
Eskom may choose to delay the shutdown of old coal-fired power stations that are reaching their end-of-life, but this cannot be indefinitely delayed. As the Presidential Climate Commission clearly said in its report on the decommission of Komati power station last year, the sooner Eskom starts planning for the shutdown of other power stations the better. Not only for the benefit of the workers and communities that now depend on those power stations but also to secure SA’s access to international just transition and climate finance.
Under Marokane’s leadership Eskom will soon have to put forward a clear plan for decommissioning so planning to create new opportunities where stations will be shutdown can start.