For once, cable theft not to blame for comms woes
New CEO De Ruyter says renewables ‘a good thing’
If your world has been shaken by slower internet speeds over the past 10 days, an undersea earthquake might be to blame.
Writing in Business Times today, tech guru Arthur Goldstuck says the most likely cause of breaks in two undersea cables linking SA to the world wide web was a 5.6 magnitude earthquake near Ascension Island in the Atlantic.
A ship set sail from Cape Town this week to repair the cables but may only complete its work in 10 days’ time. Until then, SA will be short of about one-third of its usual bandwidth.
Many service providers used one of the broken cables as backup for the other, and said a scenario in which both failed simultaneously was unprecedented.
However, customers of the major mobile network operators — Vodacom and MTN — were largely unaffected, as these tend to have both part-ownership and access to most of the cables running up both the east and west coasts of Africa.
● Faced with myriad challenges, maintenance backlogs and crippling load-shedding Eskom’s new CEO, André de Ruyter, is welcoming plans for mines to begin generating their own power as a means of easing pressure on the grid.
In the last financial year mines contributed about R30.3bn to Eskom’s revenue of R193bn, according to figures provided by Eskom. The struggling utility’s revenues are already under pressure and would face further erosion should it lose large customers.
But De Ruyter said this week self-generation by industry was necessary.
“I’m not that concerned about it because I think in the short term that would be a positive development because it allows us access to electricity that is currently being generated … we can then use it to add to our own supply.”
This would allow Eskom to undertake necessary maintenance.
Rolling blackouts were reintroduced in November, hobbling the economy. Some mines closed early so that workers would not be trapped underground during blackouts.
Anglo American Platinum said this week it had incurred R742m in lost production due to load-shedding last year.
A study by the Council for Scientific & Industrial Research published this week found that the cost of load-shedding to the economy last year was between R59bn and R118bn, Business Day reported.
Attempts by Eskom to undertake maintenance resulted in unplanned load losses, which are currently between 10,000MW and 13,000MW, De Ruyter said.
The utility needs to reduce this to below 9,500MW for optimal function of the grid.
“Eskom is in a crisis. There’s no denying that. But if I thought this was mission impossible I wouldn’t have taken on the assignment.
“It is fixable, doable, going to take a lot of hard work … from the entire Eskom team and SA as well to turn the business around.”
He added that in the longer term the generation of independent power was positive.
“We need to crowd in private capital to contribute to power generation in SA and whether that be through renewables or other forms of generation is a good thing … We think it gives us the necessary headroom to do what needs to be done.”
But bureaucratic red tape continues to stall the introduction of self-generation.
Minister of mineral resources & energy Gwede Mantashe last month promised to take steps to procure more private power.
The department published a request for information to establish short-term options.
Several mining firms have applied to generate their own power but require a ministerial determination.
The Minerals Council SA said: “The projects envisaged would take from several months to three years to develop and implement, depending on their nature and size.” Discussions with the government had started about the requirements to implement self-generation.
Herman Pretorius, spokesman for the Energy Intensive Users Group of Southern Africa, said most of its members are building power generation projects of more than 10MW, which requires ministerial approval to be licensed.
“Nothing is happening. We would like the minister to take this on.”
Rod Crompton, adjunct professor at Wits Business School’s African Energy Leadership Centre, said a risk attached to broadening the scope for independent power generation was that once Eskom’s stations ran optimally there may be an oversupply of electricity.
Market share
As a result, the utility may lose market share and sales. But Eskom’s challenge is that its power stations have been built with loans that need to be repaid, whether the stations are in use or not.
Crompton, who is an Eskom board member, said he was commenting in his capacity as an energy expert.
“If Eskom sales are reduced then tariffs will have to go up per unit in order to repay the loans.
“The double bind we find ourselves in as a country is, should we bet on Eskom getting all its plants to run optimally?
“If we take that bet it means we don’t need to invest in other power stations … it all comes down to your view of the future,” he added.
De Ruyter said Eskom’s management will present to the board a “sufficiently detailed, well-considered plan” at the end of this month on steps needed to restore the integrity of assets.
Other priorities include entering longerterm contracts with suppliers, including coal.
Voluntary severance packages will be introduced to trim the wage bill.