Dim legacy after 30 years
CRISIS: SA NEEDS TO TRANSITION TO RENEWABLES WITH REALISTIC PLAN Eskom is now country’s biggest challenge after massive bailouts.
In 1994, the ANC won the first democratic elections, promising “electricity for all” as part of its Reconstruction and Development Programme. Back then, only 36% of South Africans had electricity in their homes. The programme promised to double that number by 2000. Thirty years later, Eskom is the biggest challenge facing the country.
It has a huge debt of over R400 billion, despite receiving over R270 billion in government bailouts since 2008. Load shedding is causing an economic crisis. The government must end the crisis by shifting towards a renewable energy economy based on wind and solar resources.
What went wrong? Just two years after apartheid ended, the ANC government discarded the Reconstruction and Development Programme in favour of a the Growth, Employment and Redistribution policy, based on neoliberal assumptions about a limited role for the state.
Two years later, a new White Paper on Energy predicted SA would run out of energy by 2008, if new power stations were not built. Government decided new power stations must be built by black-empowered businesses. The prices of electricity needed to increase to make it viable. But exports were dependent on cheap electricity so it never happened.
Scheduled power cuts began in 2007. In 2008, Jacob Zuma came to power. This heralded the state capture period. In 2010, the government took out its first big loan – $3.75 billion (about R72 billion today) – from the World Bank to build Medupi and Kusile. A shadow state set its sights on corruptly benefiting from the build. Zuma also did a deal with Russia for nuclear power stations. Fortunately, the deal was ruled illegal.
At the same time, an Independent Power Producers Procurement Office was set up in 2010, to procure renewable energy. In 2015, Eskom’s two chief executive officers, Brian Molefe and Matshela Koko, refused to sign the power purchase agreements. This was a fatal error. It would have brought online 5GW of renewables. That would have eliminated 95% of the load shedding that SA has today.
In 2018, Cyril Ramaphosa merged the mineral resources and energy portfolios and the new minister, Gwede Mantashe, released an Integrated Resource Plan in 2019, providing for a very large increase in renewables. But he later delayed renewables.
Pravin Gordhan, the minister of public enterprises, said the solution was the unbundling of Eskom. It was approved in 2019, but the National Transmission Company was set up in 2024.
By 2020, then Eskom CEO André de Ruyter realised that unless large quantities of generating capacity were brought online fast there would be power cuts by 2025. This happened by 2023.
The latest national electricity plan reverses the 2019 commitments to renewable energy. It dramatically increases the emphasis on gas – and SA doesn’t have much gas. SA needs to transition to renewable energy plus batteries and a gas reserve. The latest national electricity plan should be replaced with a realistic plan. It should not emerge from behind closed doors at the department of mineral resources and energy.