The failures of Eskom are partly a result of the government’s neglect to implement its own policy, experts say, as the restructuring of Eskom has been an official policy since 1998 and is still yet to be fully implemented.
This is according to energy analyst Chris Yelland, who referred to the Department of Minerals and Energy White Paper on the Energy Policy of the Republic of South Africa, published in 1998, in an interview with Newzroom Afrika.
The paper provided a background to South Africa’s energy sector, key policy challenges, and the government’s proposed policies – including implementation, monitoring, and evaluation details to meet the country’s electricity needs.
According to Yelland, the White Paper warned that Eskom’s surplus generation capacity would be fully utilised by 2007 unless the government took action.
Despite this, the government did nothing, and by 2007, Eskom was unable to meet the electricity demand and had to resort to load shedding to prevent a nationwide blackout.
Fast forward over a decade, and, on average, South Africans spent less than 30 minutes per day without power in 2021 before rocketing to 2.25 hours in 2022 and 4.8 hours in 2023 – with analysts expecting load shedding to remain in 2024 at around 2.6 blackout hours per day, or 39.8 accumulated days.
Warnings aside, the White Paper also recommended unbundling Eskom into three separate divisions – generation, transmission, and distribution. It further suggested that the private sector plays a significant role in South Africa’s electricity supply industry.
Twenty-five years late, this has been dubbed Eskom’s turnaround plan, which is still being implemented.
“It is 25 years later, and we are still talking about the same things, including Eskom’s unbundling, an electricity market, and the private sector’s involvement in generation,” Yelland said.
Yelland stressed that it is vital for the Electricity Regulation Amendment Act to be passed by Parliament, which promises to set up a competitive electricity market, increase private power supply, and allow for the unbundling of Eskom.
He warned that the national election later this year threatens to derail the passage of the Act or delay its passage and prolong the crisis South Africans are facing.
Progress made
At the start of the year, Eskom announced that it had appointed directors to the board of the National Transmission Company of South Africa (NTCSA) – a big step forward in reshaping the company and legally separating it into three entities.
Transmission is the first of Eskom’s three divisions to achieve legal separation, with the NTCSA already registered and received approval for the requisite licenses from the National Energy Regulator of South Africa (Nersa).
Under the proposed structure of the ‘new’ Eskom, a new holding company (dubbed NewCo) will operate with three subsidiaries that function independently.
Transmission: National Transmission Company of South Africa (NTCSA)
Distribution: National Electricity Distribution Company of South Africa (NEDCSA)
The remaining division still in the starting blocks is the National Electricity Distribution Company of South Africa (NEDCSA). Restructuring the distribution company still has a long way to go.
The next steps have also been taken to establish the NewCo to oversee these operations. Eskom said it has finalised the due diligence report for the establishment of the new holdings company, and this will be submitted to the DPE for consideration.
