Our new Public Enterprises Minister Lynne Brown was centre stage this morning at a news conference at Eskom, which saw a fresh plea from this crucial service provider for us to use less of its service. Ideas on offer were for customers to dress up for outdoors indoors, and also for using hot water bottles, so we consume less fuel for heating in our homes. Meanwhile, Eskom has a multi-million rand funding shortfall, and says it could be some years before the electricity system is producing all the power that is needed. In an effort to further dampen consumption, Eskom bosses are in new talks with their biggest industrial customers to see how further cutbacks in consumption can be achieved. It’s going to be a tough winter…..
The Minister told the media conference at Eskom HQ that electricity remains one of the critical building blocks for economic growth – even if there isn’t enough of it (my words not hers). She noted that Eskom continues to face challenges in the absence of significant new capacity being brought on line.. This means things are going to be very tight in the short to medium term. Due to the levels of tariff hikes which have been granted being lower than Eskom wanted, the utility faces a R225bn funding shortfall. Efforts are underway to close the gap, but not much light was shed on this, so to speak…. Acting Eskom CEO Collin Matjila gave a very long, very detailed and very dull update which pretty much echoed the minister’s gloomy message. He emphasised that the system remains tight and vulnerable this winter. Demand is highest during this period of winter. Industrial and other business customers have come to the party by reducing demand, but even so on 3 emergency occasions in February and March, industrial customers were instructed to further reduce demand. On one of these days, there were wider power cuts so we could all join in the fun. In a statement which would have been funny were it not so serious, the electricity boss then postulated that sometimes people use appliances to heat their homes even when it is not really that cold. Instead of living in a nicely heated home, he wondered why we don’t dress for the weather – to postpone the switching on of our electric heaters? And why not use gas heaters and – this one was probably the best remark of the morning – why not use hot water bottles? The acting CEO confirmed that the probability of load reductions and load shedding remains high – in the event of significant “incidents” on the power system. In other words, we are so close that it won’t take much to trigger more power cuts. And to prepare for this, he advised residential customers to familiarise themselves with load shedding schedules…He even gave the link….. http://loadshedding.eskom.co.za/.
Now I could have misheard the Eskom chairman, because I was sitting near the back of the room for easy escape, but I am pretty sure that not only did he echo this ’we need to save’ message, but I think he also suggested this would be patriotic. Instead of laying down your life for your country, why not turn off your heater, put on a wooly sweater and sit in the dark?
During questions, various official confirmed that Eskom is again talking to its industrial customers to seek ways of further reducing demand. The platinum industry has been playing its part, with consumption halved during the current strike, but that can’t go on forever.
My old chum Tshediso Matona, who is Director General at Public Enterprises, confirmed that a strategy is being devised to work out the focus of new power generation investment – gas is a “no brainer”, There is likely to be a new coal-fired plant, but there still needs to be a decision on nuclear. His body language suggested to me that there is some back-tracking on this nuclear option, but nothing definite emerged. He also noted that Stats SA has been asked to investigate the widely held belief that electricity shortages are holding back economic growth. He questioned how much of the economic malaise is due to shortage of electricity and how much due to world economic conditions, noting that during the day there is sufficient capacity. The shortages kick in in the evening. And he claimed Eskom has never turned down someone who has wanted to be connected.
A new CEO has been selected by ESKOM and the proposal is with government. It can’t come too soon.
ZA Confidential is a subscription newsletter. For details of subscriptions or any other matter, please contact firstname.lastname@example.org