Load-shedding is here to stay, Cyril Ramaphosa tells parliament
President Cyril Ramaphosa on Thursday told MPs that load-shedding was here to stay.
“Eskom has to undertake the fundamental maintenance that is necessary to improve the reliability of our electricity supply. As it continues with maintenance, load-shedding will remain a possibility for some time to come, but we are not simply waiting for the inevitable,” said Ramaphosa.
The president was answering questions in the National Assembly. The first came from the DA’s John Steenhuisen, who quizzed Ramaphosa about Eskom’s rolling blackouts which appeared to be more frequent and severe. He asked Ramaphosa whether the situation did not constitute a looming crisis and how this affected the economy, matric examinations and the vulnerable.
Ramaphosa told parliament that Eskom’s priority was to secure “a stable and reliable supply of energy”.
Other issues were the management of Eskom’s debt, overcoming the skills deficit within the company, steadily improving municipal revenue collection, further improving Eskom’s maintenance capabilities, addressing procurement challenges and rooting out all forms of corruption and criminality. “Also including some of the incidents that Eskom management has been reporting where pylons have been cut, and disturbing the operation of the grid.”
There was no quick fix for the embattled power utility, he said. “This is a complex problem, however we have developed a road map towards a revitalised Eskom within a transformed energy industry. We are making significant progress in implementing the road map and are determined to persevere regardless of the difficulties.”
He said progress has been made in adding generation capacity.
“Eight preferred bidders have been appointed for the 2,000MW mitigation IPP procurement programme. These are for projects that can deliver electricity into the grid within three to 12 months from approval.
“The other one is that we have revitalised the renewable energy independent power producer procurement programme with 25 preferred bidders, announced in the fifth round. Together they are expected to produce about 2,600MW of wind, solar and photovoltaic electricity,” said Ramaphosa.
In addition, he said from the renewable energy bid 1,000MW had been connected to the grid at the end of June and more than 400 megawatts would be connected by the end of the year.
He said as part of Eskom’s road map, the company is restructuring three subsidiaries. “The legal separation of the transmission entity is planned for December 31 and the legal separation for the generation and distribution entities is scheduled for next year.”
The Electricity Regulation Act and pricing policy is being amended to reflect the new structure of the electricity industry. “The restructuring of Eskom will in many ways transform the sector and will enable greater competition and investment in new generation capacity.”
Some municipalities are getting ready to take advantage of what flows from this transformation process and have elected to generate power for their residents, he said.
“This will remove the risk of relying on one entity that has a sole monopoly on power generation in our country.”
The government has over the past year put in several additional measures to ease the energy constraints, he said. “We have amended schedule 2 of the Electricity Regulation Act to exempt embedded generation projects up to 100MW from having to apply for a licence. This will allow for more private sector investment in electricity generation without any public funding and will reduce the risk of load-shedding.”
When asked about the challenges in Eskom’s management, Ramaphosa said, “This is a matter that we continuously look at. We look at the capability, the effectively of the leadership that resides in Eskom and all our state-owned enterprises and we evaluate that against a number of indicators.”
Eskom, he said, was one of the most unfortunate entities in that over the past 15 years, it had a new CEO almost every 18 months. “We need to examine precisely what the management is trying to do. Load-shedding is going to be the key challenge that our economy faces.
“We are resolving the problem and that includes bringing in new skilled people and continuing to evaluate those that we have from the board and the management as well. This is something that is continuously top of mind.”
When asked if the government would be in a position to bail out Eskom should the need arise, Ramaphosa said: “We all agree that Eskom is too big to fail because a failing Eskom would be catastrophic for our economy and the lives of our people all round. Eskom is our collective problem that we have got to solve and it doesn’t help us to sit and not do anything or to be on podiums and be accusatory all the time.
“What we should be doing is finding ways to address the problem.”