It is likely that in future the provision of new electricitygenerating capacity in South Africa will come from the private sector and will utilise a wide variety of technologies, including diesel, oil, wind energy, gas, waste and nuclear energy.
This was the view expressed at the Metals and Engineering Indaba by Chris Yelland, energy expert and managing director of EE Publishing. He said SA needs to move away from being solely dependent on the state-owned utility Eskom for electricity provision and also from depending on coal as a single source of energy.
“In the past a ‘command economy’ approach saw huge power stations being built close to sources of coal to capitalise on economies of scale. However, in the current economic environment, where levels of uncertainty related to demand and rates of exchange, among other things, is high, South Africa needs to manage risks by decentralising power generation and building smaller generating units, which are more flexible,” he said.
He said that Eskom does not have “space” to catch up with its huge maintenance backlog, as it is under pressure to limit load-shedding.
“After finishing the long delayed Medupi power station and its successor, Kusile, I believe Eskom will have a limited role to play in new electricity provision. The financial constraints under which it is operating are simply too onerous – the R23bn in equity provided by the government is insufficient to meet its approximately R200bn financing gap. The ANC is apparently considering privatising Eskom with mention of the ‘Chinese option’. I believe that government will have to sell part of its stake and that in future the private ownership of the utility could be as high as 30%.”
Speaking at the Indaba, Natasha Mazzone, the DA’s shadow minister of public enterprises, said that secure energy supply was the lifeblood of any economy and that SA’s current energy situation could be described as “utter chaos, born out of a lack of proper maintenance and further exacerbated by the utility’s current financial constraints”.
“We believe the minister of public enterprises should end the monopoly that Eskom has over electricity generation and distribution, something that President Zuma has made reference to in three State of the Nation Addresses but which has now quietly disappeared from the table. We also need to have access to the latest energy plan for the country. Furthermore, we advocate that the Gas Utilisation Master Plan be fast-tracked as this option can, we believe, be put into operation in a few years,” she said.
It is understood that the gas option for the economy is also being looked at by the dti, following the biggest gas discovery in the world for many years in Mozambique.