Something is not quite right at Eskom

At first glance, the headline of this article seems to be stating the obvious. I mean, what gave it away? Eskom’s massive debt burden or the fact that the utility cannot keep the lights on? Even the Electricity Minister is clutching at straws imploring South Africans to donate their braai coals to Eskom during winter to ensure that the lights stay on.

A lot has been written about Eskom and the country’s deepening Energy Crisis. You can hardly open a website or tune into the news without reading or hearing a breaking story about the single topic that is foremost in the mind of every South African.

Prior to the current economic turmoil that the world is currently experiencing, four of the worlds fastest growing economies were African economies. While countries like Rwanda and Kenya were growing by upwards of 10%, south Africa was languishing at 1.5% economic growth. A recent study by PwC points out that South Africa lost 7% of economic growth to loadshedding in 2022 (the worst year of loadshedding on record).

Government has put plans in place to address this – which go beyond the request for braai coals – and Eskom has indicated that it would toe the governmental line. But is it serious about this?

Adhere to the loadshedding schedule please

The Moneyweb article points out that Eskom is threatening to take control of local load shedding in the Free State town of Frankfort in an effort to stop the use of locally produced solar power to spare residents from load shedding during the day.

Rural Maintenance, the company contracted by the Mafube Local Municipality to manage electricity distribution on its behalf, is however having none of it. It has lodged an urgent application in the High Court in Johannesburg to maintain the status quo until the dispute with Eskom has been settled by electricity regulator Nersa.

The article adds that the urgent application is supported by the Frankfort Business Forum and will be heard on Wednesday (5 April). AfriForum will at the same hearing apply to be allowed as friend of the court.

Adjusting to demand

The Moneyweb article points out that Rural Maintenance took control of local load shedding in the municipality in February and is running a pilot project to mitigate it in the town of Frankfort by using solar power generated by four solar farms it owns together with 20 other local shareholders, mostly farmers.

Rural Maintenance buys electricity from the solar farms at a rate lower that that paid to buy Eskom power, which assists in keeping consumer tariffs at a level lower than the maximum Nersa allows.

The article adds that it has since fine-tuned the rotational blackouts according to the needs of electricity users. Its roster provides for fewer, but longer slots in the industrial zone and more frequent, shorter slots in the residential area.

“Big milling plants take two hours to start up their machines and they then run in a cycle of six hours,” says Jannie Schabort, Chair of the Mafube Business Forum. The more frequent, shorter slots “at least keep the fridges cold” in the residential areas, says Chris Bosch, CEO of Rural Maintenance.

Critical infrastructure runs smoothly

The Moneyweb article points out that The roster further ensures that municipal water pumps and sewerage system are powered to prevent sewage spills into the Vaal River system.

Whenever the electricity from the solar farms exceeds the savings Eskom requires during load shedding, the town’s lights are kept on.

This means that load shedding is largely limited to night-time when the sun doesn’t shine.

The article adds that the four solar farms currently have a joint generation capacity of 3.7 megawattss (MW), which will increase to 4.2MW when the next phase is completed.

Farmers make a plan

Bosch says he warned the community some time ago that “trouble is on its way” with power supply and it should invest in alternative sources of energy for future growth and development. One of the local farmers then contacted him and said he and other farmers wanted to invest in the solar project.

“Within a few weeks we had R100 million and within 14 months the plants were operational.”

The Moneyweb article points out that was in August last year.

The true purpose of the solar farms is to provide electricity for agri-processing in agri-villages to be established in the community. The plan is to beneficiate the agricultural produce farmers produce locally and thereby create jobs and ensure economic development.

Eskom had indicated that it could not increase supply in small towns like Frankfort and the farmers had to come up with their own solution.

The establishment of the agri-villages is currently being delayed by municipal land use issues and Rural Maintenance now utilises the solar power to mitigate load shedding.

The Moneyweb article adds that, according to Schabort the plan is to eliminate load shedding completely in Frankfort, Villiers and Tweeling. Cornelia will follow later, because a new distribution line will have to be installed first.

Eskom has started objecting to the fact that Rural Maintenance fails to implement load shedding in Frankfort when instructed to do so.

From court documents it seems the utility includes the solar power when it calculates the baseline before load shedding and expects the saving required by load shedding to be from that level. Only the Eskom supply should be considered, and Eskom now accuses Rural Maintenance of putting the national grid in danger.

Eskom is threatening to take over the implementation of local load shedding, which will see the end of all the mitigation measures and fine-tuning Rural Maintenance has implemented to lessen the burden on the town.

Rural Maintenance’s Bosch says if Eskom enforces this, it will be the end of investment in alternative power generation, because those who have invested in the plan will be precluded from enjoying the full benefits and won’t be allowed to derive the most economic value from it. “We will be forced to switch off some of the generating units at the solar farms,” he says.

Sinister indeed

If Eskom was committed to resolving the Energy Crisis, surely it would be more than willing to allow towns to go off the national grid? The Moneyweb article quotes Schabort saying that the actions in Frankfort can be a blue print for similar projects to be established around the country.

Why then is there such a resistance from Eskom? One can only assume that it is because they are trying to keep a strangle hold of their monopoly. But why? Why are they so obsessed with this?

After many years of being against privatization, Government has finally changed its course and will be allowing IPPs to sell excess power to Eskom. Further, Government has instructed Eskom that it will have to hand over the control of certain power stations to private companies in the future. But if Government sees the value of privatisation, surely it should be fast tracking this? Or is there something sinister about this as well? We cannot ignore reports that Eskom is significantly overstaffed and one would hate to imagine what mass unemployment would do to the ANC’s hopes of securing a win in the 2024 General Election.

Again, without stating the obvious…something is not quite right at Eskom