Not a drop of diesel and, worse, not the hint of a plan
As an interview, it could not have been more blunt. Energy writer Chris Yelland had called Eskom spokesperson Sikonathi Mantshantsha: “I have just contacted the Eskom spokesperson by phone and received the following clear answers in respect of Eskom diesel supplies for the emergency diesel-driven open cycle gas turbines [OCGTs] at Gourikwa and Ankerlig,” Yelland wrote on Twitter on Sunday. He then ran the interview:
Question: “Has diesel for the Eskom OCGTs run out?”
Answer: “Yes, the diesel tanks have physically run out, and the diesel tanks for the Eskom OCGTs are empty.”
Question: “When will the diesel for the OCGTs be replenished?”
Answer: “Not until April 1 2023 at the earliest, or until someone provides Eskom with more money for procurement of diesel, noting the Eskom spend overrun on diesel to date is two times budget for the current financial year.”
Question: “Has additional diesel been ordered?” Answer: “No.” Question: “Can you confirm how many litres of diesel Eskom has burned this calendar year to date?”
Answer: “As many litres as R11bn could buy.”
We know now that Eskom is asking the National Treasury for another R15bn to pay for diesel until the end of March, but even if it manages to find the money, the interview hides a terrible truth.
It is that Eskom’s management has surrendered. The challenge was always to run Eskom as a business, to apply private sector discipline, when CEO André de Ruyter was appointed two years ago. By Sunday, the company had spent twice the amount it had budgeted on diesel for 2022/2023. De Ruyter would have rightly seen it as his fiduciary duty to stop spending money on the emergency peaking power that the diesel enables.
I happened to pass by Gourikwa outside Mossel Bay on Sunday. There was no shimmering heat coming from its chimneys. Next door, the PetroSA gas to liquid refinery was quiet, as it was the week before. When the plant is running, you can see the gas flare flames from miles away.
The plants represent a huge statement of SA state power silenced by negligence and arrogance. There is no fossil fuel refining at all in SA. In 2019, there were five working refineries.
Even if gets the money, it’s hard to see De Ruyter willingly staying on at Eskom. It looks as if it has beaten him. He wouldn’t be the first CEO to walk, and he won’t be the last. I hope his going is dignified. He has always tried to tell the truth.
I have a paper produced for briefings that De Ruyter gave business leaders just a few months ago. In them he says quite starkly that “current projections show that by 2030, new capacity of at least 50-60GW renewable capacity will need to be added, even if there is no incremental demand from economic growth”.
We are so far off that mark it would be hilarious if it weren’t so serious. Neither Eskom nor the government is able to do the right things quickly enough.
Yet there was President Cyril Ramaphosa telling both houses of parliament in London on Wednesday that he expected “rich” countries like Britain to supply mainly concessional funding to SA as it decarbonises. He told UK MPs they should see their’ It s funding hard to as describe “compensation how for the harm done and the harm yet to be done” to SA. feeble he sounded. The British know about their past and are used to being lectured about it. They hardly needed another whingeing lesson from Ramaphosa. He totally missed a fantastic opportunity to rouse his hosts behind a resurgent SA. Lingering British doubts about how to respond to our pitiful position on Russia’s invasion of Ukraine will be quickly vanishing.
People aren’t stupid. You can’t demand free money to replace coal when you still have not finished building two of the biggest coal-fired power stations in the world, as we are in Medupi and Kusile.
The fact that we have now run out of diesel, with nothing on order for the Christmas period, is a crisis for the entire economy, let alone tourism. Much as British tourists might love visiting here, no-one wants to have to put up with intermittent power and it’s no use expecting new arrivals to simply get used to it. They’ll go elsewhere.
And even if the Treasury manages to find R15bn, negotiations with Eskom will take ages. Expect the plunder of budgets from welfare to health and education to fund it all — if it ever happens. For R15bn you could buy enough renewable energy to stave off loadshedding for decades.
All of this would be easier to take if there was any sense in the government. Why is there no household incentive to encourage solar panels and batteries? I have them (they cost less than the cheapest new car in SA) and am mostly unaware of Eskom’s blackouts. So take the VAT off panels and batteries! Free up some pressure on Eskom. What’s to lose?
Common sense is sadly a step too far for this government, but we knew that already. If there’s any cheer in all of this it is simply that the ANC, one of the last substantial relics of apartheid still standing, is slowly on its way out. If you can stand it, stick around.
IT’S HARD TO SEE DE RUYTER WILLINGLY STAYING ON AT ESKOM. IT LOOKS AS IF IT HAS BEATEN HIM
RAMAPHOSA TOTALLY MISSED A FANTASTIC OPPORTUNITY TO ROUSE HIS HOSTS BEHIND A RESURGENT SA