ANC in the spotlight as Eskom fails

In 2011, South Africa led the way in renewable energy planning, with the newly created independent power producer (IPP) procurement office working to get green energy on the national grid.

The brainchild of the National Treasury and the Development Bank of Southern Africa, the model was replicated around the world. Only, back home it went nowhere. 

Twelve years later, the country is buckling under stage 6 load-shedding because Eskom just doesn’t have sufficient generation reserve capacity to maintain its ageing coal fleet and keep the lights on at the same time. 

This week, that failure culminated in a spectacular backlash, with civil society and opposition parties heading to court and taking to the streets in protest (or planning to do so) against the failure by successive ANC administrations to stave off the crippling power cuts.

At the ballot box, the ANC has already faced the music for its failure to manage the grid effectively: blackouts are a key factor for voters and, as load-shedding has increased over the years, so the party’s support has declined.

It faces a crucial election in 2024 — exactly 30 years after it came to power in South Africa’s first democratic election — and its administration under President Cyril Ramaphosa has once again failed to address the country’s power woes. That’s set to hurt the party in the election, with polling before the latest round of blackouts putting its support at just 40%.

Though Ramaphosa did back out of a trip to the World Economic Forum in Davos this week so that he could address the energy crisis, it’s uncertain whether anything will come of that. After all, he cut short a trip to the UK and US last year to deal with stage 6 load-shedding, but little changed as a result.

Back in 2011, the IPP office was taken over by the department of mineral resources & energy (DMRE). Public enterprises minister Pravin Gordhan tells the FM that what followed was tragic — and played a key role in explaining the current situation in the country.

Under Eskom’s then CEO, Brian Molefe, the programme stalled for six years as he insisted on continued reliance on coal. In hindsight, that’s perhaps not surprising, given his implication in the capture of the state-owned utility. 

But that wasn’t the first misstep. That goes back to 1998, Gordhan says, when the cabinet decided not to build any more coal power stations, assuming that the private sector would pick up the slack. (It didn’t, culminating in the first bout of load-shedding in 2007.)

Around 2004, there was a flurry of activity as the government realised demand would outstrip supply, and it decided to add capacity to the grid. 

“But everybody says that by then the design capability had gone, the construction capability had gone and so you were doing things on the hoof,” Gordhan says.

Instead of fixing the problem, successive ANC administrations plunged Eskom deeper into crisis. Consider, for example, the “keep the lights on at all costs” approach to the 2010 Soccer World Cup — effectively cutting back on maintenance. And the state capture years, when decisions were taken to further the commercial interests of the few instead of those of the country. 

Factor in the lack of decision-making when it was needed, followed by a blind rush to build capacity, and you had a “deadly” convergence, Gordhan says.

He describes how the areas around Eskom power stations today have become “crime scenes”, making specific reference to Tutuka power station near Standerton, Mpumalanga. 

Among the first remedies was the signature of IPP agreements in 2018, soon after Ramaphosa took office. Again, the programme stalled.

This time, mineral resources & energy minister Gwede Mantashe was to blame: he openly admitted in 2021 that his arm had to be twisted to lift the threshold to 100MW for companies to produce their own electricity without a licence. Embedded generation is the quickest way to bring additional power to the grid — but Mantashe has been a reluctant participant in the liberalisation of the energy sector.

The ceiling on private generation was lifted only last year, during a bout of stage 6 load-shedding. 

Of course, Gordhan himself is not blameless in the whole affair. He and Mantashe have presided over the two departments overseeing Eskom. The battle between the pair over embedded generation has resulted in policy stagnation and indecision — and very likely contributed directly to Eskom’s challenges.

The public enterprises minister has been criticised — even by insiders in his own department — for being indecisive and taking little action in the face of Eskom’s deep problems. And, when Eskom management previously pushed for a freeze on unaffordable wage increases, it was Gordhan who insisted these were pushed through.

I’m not saying [stage 8 load-shedding] will happen, just that it is possible

—  Chris Yelland

For the moment, the situation is marginally easier; Eskom on Monday announced a return to stage 4 and stage 5 load-shedding, then promptly cancelled a planned media briefing so that its leaders could attend emergency meetings with the president.

In all, breakdowns at the utility have taken 16,173MW off the grid. Severe, certainly — but it has been worse, says Chris Yelland, energy analyst and MD of EE Business Intelligence. 

Yelland has been consistent in laying the blame at the feet of the government, whose failures at policy and practical levels are well documented. 

The utility needs to do crucial maintenance, he says. “But they can’t do the level of maintenance they need or require because there is no generation reserve capacity. So if they want to do extra maintenance … they have to shut down generation. That’s not going to help in the short term. 

“So what really needs to happen is we need to encourage and build up generation reserve capacity, which gives them the space to do the necessary maintenance.”

That, he says, is out of Eskom’s hands. “It’s in the hands of the DMRE and minister Mantashe to bring on new generation capacity fast. It’s also up to the private sector and electricity users to build self-generated and embedded generation to relieve Eskom of the burden it is not able to meet, and therefore reduce load-shedding.”

He’s referring to ordinary households but also, more importantly, to big business, farms, mines and factories.

Will the country reach stage 8 load-shedding? It could, says Yelland. “I’m not saying it will happen, just that it is possible.” 

In his estimate, 6,900MW could be off the grid in the longer term: units 1, 2 and 3 at Kusile are out of commission, taking 2,400MW from the grid; operation of unit 5 at Kusile has been delayed by a year due to a fire — that’s a further 800MW; Koeberg unit 1 is down for six months and, when it returns, unit 2 will go down, taking an additional 900MW off the grid for at least the next year. With Eskom running short of diesel, a further 2,000MW could be lost.

That means any unplanned breakdowns could result in load-shedding escalating.

At the time of going to press, Ramaphosa and his key ministers in energy were mum about the crisis. But the FM has seen a document by the national energy crisis committee, which met this week, that includes suggestions on how to alleviate load-shedding in the medium term.

Priorities include the development of legislation to allow energy projects to “proceed more quickly and enable co-ordinated and decisive action”, and for the government to “incentivise the rollout of rooftop solar in homes and businesses”. The document says work is also under way to accelerate the procurement of additional capacity.

Again, success is uncertain. Ramaphosa announced a raft of measures to alleviate load-shedding late last year, but they’ve either made little difference, or their implementation has stalled.

The ANC is facing a groundswell of anger as South Africans are left in the dark — and rightly so. This is, after all, a crisis of its own making

—  What it means:

Meanwhile, the opposition DA is planning a protest march to ANC headquarters Luthuli House, and to take legal action around the rising cost of electricity. A team of crack lawyers has also been assembled by other opposition parties and unions to take Eskom and the government to task over their failures, as well as over the 18.65% electricity tariff hike granted by regulator Nersa last week. 

One South Africa Movement convener Mmusi Maimane, who was among the signatories of a letter of demand sent to Eskom and the government on Monday, tells the FM this is a precursor to court action.

Another civil society initiative, #StandUpSA, is planning to march to Eskom’s headquarters on February 2 in protest against rising electricity costs and rolling blackouts.  

But Yelland says that when it comes to footing the Eskom bill, it is always the user and the taxpayer who will pay. 

“Whatever doesn’t come from the tariffs will come from the taxpayer through government bailouts anyway,” he says.

“So it really doesn’t matter what the tariff increase is. If the price increase is high, there will be less need for a government bailout; if the price increase is low, there will be more need for a government bailout.”

Either way, it’s the taxpayer who will have to cough up.

Between the devastating impact of the rolling blackouts and anger at the tariff hike, there’s been a groundswell of opposition. South Africa experiences social unrest almost weekly — usually against poor service delivery. But only twice before has the line between classes been so blurred by anger at the government: on the issue of e-tolls, and against then president Jacob Zuma after state capture allegations emerged. 

Both were effectively done away with. 

Now that the ANC and the ANC-led government are in the crosshairs, one can’t help but wonder whether the party will survive this crisis — a creature of its own making.