News24

SA electricity 'in crisis'

2012-06-18 09:10

Cape Town - Electricity supply in South Africa is in crisis despite the fact that there has been no repeat of the blackouts of 2008, the Free Market Foundation has said.

"What we have now is more of a crisis than people realise because the lights are being kept on creates an illusion of non-crisis, but in fact, the crisis is they are running their backup base load diesel generators 24/7," Leon Louw, executive director of the Free Market Foundation told News24.

The price of oil has direct implications for the running of the generators which should be used as backup for cheaper coal-fired power stations.

"The cost of generating power is tenfold of what it should be if we were keeping the diesel as base load and backup," Louw added.

Eskom has indicated that the tight electricity supply will be relieved when the Medupi Unit 1 power station comes online in 2013, but the Louw expressed doubts that this would happen on schedule.

Blackouts

"We are basically keeping the lights on at a potentially catastrophic cost and Medupi was meant to come on power last year and whether it will come on next year remains to be seen," he said.

Minister of public enterprises Malusi Gigaba said that the government was committed to preventing a repeat of the country-wide blackouts of 2008 that negatively impacted on economic activity.

"Government and particularly the department of public enterprises remains resolute that the country should never go through another period of painful rotational load shedding as experienced in the past," said Gigaba.

He said that during winter, electricity supply was under strain, but the utility was undertaking maintenance work to eliminate the backlog by 2013.

"To be forthright, the next 18 months, particularly the next few weeks, are expected to be the tightest we have endured thus far."

Gigaba said that his department was closely monitoring Eskom's progress on implementing programmes.

"The implementation of this strategy... [on electricity management] is monitored by the department on a weekly basis with the aim of assessing progress."

The Free Market Foundation said that political pressure and incentives have led to reckless behaviour at the state entity.

Bonuses

"We're keeping the lights in a way that according to expert advice we get is extremely reckless and the political pressure on Eskom...

"Eskom is under such political pressure and under perverse financial incentives. That is to say, bonuses get paid to Eskom management for keeping the lights on," Louw said.

The issue off financial incentives at Eskom came under the spotlight on Friday when Gigaba said he was unhappy with the bonuses paid to senior management at the utility.

Louw said the utility's behaviour was a response to a failed policy and perverse financial incentives that limited the accelerated rollout of independent power producers.

"My defence of Eskom is that it behaves rationally. If the government is willing to give it a perpetually protected monopoly, of course it will lobby for that. Policy makers should not succumb to these lobbies; that's where the problem is.

"While I say Eskom is behaving in a perfectly rational way; the people who aren't behaving are the policy makers."


- Follow Duncan on Twitter
 

Comments
  • Martin - 2012-06-18 09:30

    i bet after a price increase we will magically have more in tghe system ey eskom? I have worked with you before, any delays at medupi are probably due to your inability to sign off paperwork on time, and to come up with solutions timeously, just like the komati refurbishment.

      Martin - 2012-06-18 11:23

      Beannie, i bet they are some of the greatest knitters in sa at the moment.

      badballie - 2012-06-18 13:31

      don't forget they used the money to pay for staff annual DSTV subscriptions etc etc

      Boer - 2012-06-18 17:57

      If you need generators in the future contact us at anyproduct@gmail.com we will send them to you from the US.

      husaberg.twostroke - 2012-10-21 21:12

      The last time I was in South Africa most people I spoke to was so happy to let me know South-Africa has the cheapest elctricity in the world. Mostly bragging ect. And now whats happening???

  • sean.bezuidenhout - 2012-06-18 09:30

    Eskoms profit rose R13.2BN. Electricity costs have trippled over the last few years, the public surely does not want to hear any excuses around costs. Burn the diesel!

      Klippies - 2012-06-18 10:05

      Agreed! And cut back on the top management salaries and bonusses. If it's a crisis they should be willing to make some sacrifices as well.

      matches.matthews - 2012-06-18 11:19

      Hi Guys Funny how quickly the Eskom management can run to Government/Public to ask for money. But when they are ready to dish out bonuses they have got freedom to do as they want. I believe it is time that the bonuses of Eskom must be sanctioned by Government/Public before these top managers suck us dry.

      matches.matthews - 2012-06-18 11:28

      One more thing I developed prepaid system that curbed the financial losses in Khayelitsha by 65% - 1999. In monetary terms the gain was R1.5 million a month. Khayelitsha with +- 40,000 customers was then 1% of Eskom prepaid customer database of 4 Million. In the early 2002’s it was estimated that Eskom was losing in the order of R200 million per month in the prepaid collections. The question still stands if this problem has been rectified.

      richard.fahrenfort - 2012-06-18 14:44

      Obviously the costs will keep rising because the cost of the fuels needed to generate the electricity in the first place is rising! Its only takes common sense to see that this is utterly unsustainable from a resource management and financial point of view. Now the 'brains' at Eskom and Dept of Energy embark on building 2 of the biggest and dirtiest coal fired power stations in the world under the guise of stablising our electricity supply to sustain growth in the economy. However, the huge increases in the cost of the power to the end users over the three years (ie: the municipalities, public and large industrials), coupled with amount of electricity that we export completely negates this intended economic growth. Lowering our energy cost would lower everyone's cost of living thereby fueling growth. We should be blanketing the northern cape, free state and parts of north west with solar panels and wind turbines. Solar and wind power are both available in abundance and require no initial energy input, unlike coal, which is limited and dirty. Not to mention the obvious job opportunities this would create...

      danie.v.niekerk - 2012-06-18 15:57

      Just leave the nuclear powerstations alone! You dont have the expertise to ramp up production. The system is more than capable of handling a higher load. . . .oh! oh! I forgot. . . .some crim stole the cables. . .leme correct myself. . .the system cant handle the extra load!

  • joe.farmer.92775 - 2012-06-18 09:44

    incompetence, corruption, excuses you ANC nothing yet vote now sheeple! 100 years of struggling to keep the lights on

      Juan - 2012-06-18 09:56

      Well actually only since 94 have the ANC taken over control of the electricity grid. Before that SA was renowned for having the cheapest and most stable electricity supply in the world, and it took the ANC only 14 years to screw it up. Now we have fat cats with enormous bonuses and soon no electricity. Banana anyone?

  • franklyn.davies.1 - 2012-06-18 09:51

    quite obviously apartheids fault....starting to sound like a very sad excuse now,couldnt possibly be an inept,incompetant goverment...i mean-they keep on getting voted in,so it must be apartheid....yawn.

  • victor.windsor - 2012-06-18 09:51

    Look surprised !!!!!!

  • victor.windsor - 2012-06-18 09:52

    There should be no bonuses until they get it completely right !!!!!!

  • Henry - 2012-06-18 09:56

    The anc did this too us on purpose. When told by eksdom we will need more power plants the anc sat on their hands. Then when the stuff hit the fan,suprise,Hitachi get some deals and wow,chancellor house has a third of the shares in the hitachi south africa division. This doesn't bother your average anc voter though,because they either steal electricity,or just don't pay for it.

  • Theo - 2012-06-18 09:59

    They can call it whatever they want, it remains total incompetency with absolut imcompetent people trying to run Eskom> It will remain a crisis 20 years from now. Sad story

  • jo.vandeijzen - 2012-06-18 10:07

    South Africa must sell its coal to China.They have to build nuclear power stations. We have enough nuclear fuel oursefs to implement this. Latest tech makes it save.

      kathleen.whiteley.7 - 2012-07-12 22:22

      Indeed Jo, and perhaps the Chinese can remind us there's no such thing as a free lunch. It is minutes to midnight.

  • hendrikvs - 2012-06-18 10:09

    Everything the ANC touches gets messed up. Keep your fingers out of the till!

  • rob.bayliss.94 - 2012-06-18 10:16

    Eskom is in the business of redistributing wealth, not distributing electricity. Once we understand that point we can see that they are exceptionally succesful. Now ask yourself what will trigger change, I cannot think of anything within a forecastable future.

  • Gavin - 2012-06-18 10:25

    and yet their remuneration bill topped R54 million with profits in the billions - as is the norm in ANC SA there is lots of BS behind the scenes. this annoys the living f'ing hell out of me.

  • Fanie - 2012-06-18 10:28

    ....and lastweek they annouced a quite big proffit....how the hell?

      patsy.smith.125 - 2012-07-12 22:06

      Logic is NOT a word in our government's vocabulary......

  • peterjohnjnb - 2012-06-18 10:31

    Sheeeeeeeeesh! This just keeps on getting better and better and doesn't it? Pretty soon we will all be living in a utopian society, where all will be free and we will have whiskey in the streams!

  • jacquesstry - 2012-06-18 10:31

    No rolling blackouts? It seems they don't live in Rustenburg. Yesterday we were without power for 4 hours, in the last 3 weeks we had blackouts for 1-3 hours at least 8 times?

  • marcus.motek - 2012-06-18 11:38

    My employer pays me an incentive bonus - it called a salary!

  • dave.ducker.3 - 2012-06-18 12:12

    Seems strange that Eskom is struggling to maintain the supply but many third party generators can not get licences to supply into the grid. Apart from all the other crap that has been mentioned above do we still send our electricity up to Zim, Swaziland etc.. and if we do, do they actually pay for it? and what about the outstanding bills how can they keep mounting up, surely you don't pay you get disconnected?

  • Jan - 2012-06-18 12:56

    Eish, it's not our job - apartheid must sort it out. Invest in candle factories, failure is certain!

  • badballie - 2012-06-18 13:30

    The amount of electricity saved nationally on a daily bases just from the change over to fluorescent bulbs has already saved Eskom in the region of millions of watts per day. The "policymaker" excuse as usual does not sit right and is nothing more than distraction. Eskom was well aware of its power needs before the ANC even broke ground on its first give away house. There is no valid excuse for the current predicament and Eskom must suffer the losses, this is like the guys you bought your car from coming to you a year later and saying they didn't charge you enough when they sold it to you, so you must pay in extra now! I would love to see people going green and pushing Eskom into a fringe market.

  • nigel.burgess.52 - 2012-06-18 13:32

    Water will be the next problem. They were warned about the power supply problems and the laughed it off. They are currently being warned about the water issues, let's see what they do.

  • jeanpierre.dumont - 2012-06-18 14:05

    I really dont understand some of these gripes....everybody blames the current ANC led government for the electricity crisis yet we forget that the planning and construction time for any new generation capacity takes years - sometimes more than 10 years. In the early to mid 90's SA was still operating in/coming out of years of economic sanctions and economic growth was negative. As such electricity demand was seen flat. Did the previous government even have the appetite to plan for new generation capacity back then? I mean why would you when the economy was going backwards? Demand for power rose continuously on the back of real economic growth from 2002. Granted the ANC led government have also made mistakes and the supply of coal has also not helped. Only reason why SA had the cheapest power in the world for years was because we had excess supply in the system for so long. I dont care what Eskom is doing to keep the lights on - as long as they continue to do so then I reckon they are doing an ok job.

      ivan.vanheerden.3 - 2012-06-19 08:12

      There were studies done in the late 90's that told Eskom that they would need at least 2 new power stations to be online by 2009 in order to keep up with projected demand. If they had started the projects then rather than diverting money into their back pockets we wouldn't have this problem. The ANC government works on a crisis driven model. They wait until everything breaks down and then run around throwing vast amounts of money in the form of Tenders to their mates in order to patch the system until the next time it fails.

      Johnson - 2012-07-08 21:28

      It took Zimbabwe only 365month from the richest African country to the poorest - we are on our way there (trust me on this one )

  • jimmy.kawa.1 - 2012-06-18 15:54

    the nat government had the forethought to put the right people in the right positions to the proper job. as of '94 there was a fully functional infrastructure in place with the technical know-how running it. the first thing the new government did was fire/retranch/drive out the 'white engineers and technical staff' in order to put their own comrades in positions of power. initially all was well because the whitey's had built a decent system. the new government failed to perfom the routine maintenance and necessary ongoing expansions. they just took the money. and look at where we are now. a crippled, failing system with none of the real specialists around to sort out the problems.

  • danie.v.niekerk - 2012-06-18 16:03

    Just leave the nuclear powerstations\r\n alone! You dont have the expertise to\r\n ramp up production. The system is more\r\n than capable of handling a higher\r\n load. . . .oh! oh! I forgot. . . .some crim\r\n stole the cables. . .leme correct myself. . .the system cant handle the\r\n extra load!

  • Adil Smit - 2012-06-18 17:20

    Massive profits, a big loan from the World Bank and people using energy-saving light bulbs and solar geysers. How much electricity is being given to neighbouring countries and at low prices to big industries? Or is this just to prepare the South African public for fracking getting the go-ahead while more and more countries say no to it and health concerns about fracking is mounting internationally. I

  • louise.cook.127 - 2012-06-19 00:37

    It's insane to claim Eskom is "keeping the lights on." The only reason the lights are on is because SA Industry - mining houses, indstrial plants and factories - cut production to use less electricity and save the grid. These are the companies that should get the fat bonuses - not Eskom! And the whole country is suffering low economic growth due to these production cuts.

  • ivan.vanheerden.3 - 2012-06-19 08:07

    Anybody driven past Mega Watt park at night? There are about 1000 spotlights burning away. Why don't you watch your stupid TV commercial Eskom and turn off your own frikken wasteful lights. It's not like anyone is actually working there after 5pm.

      Thebigguyjim - 2012-09-30 12:20

      If anyone works at all Ivan

  • Johnson - 2012-07-08 21:26

    Not just Eskom but South Africa - this country is going to the dogs (no question) corruption and wasting has not decreased in the past 10 years - why would it now

  • Bantsijang - 2012-08-09 21:06

    "While I say Eskom is behaving in a perfectly rational way; the people who aren't behaving are the policy makers."

  • robqb - 2012-08-09 22:54

    Eskom management being paid "bonuses" to keep lights on? Isn't that why they get those ginormous salaries? Hey, Eskom, do you have any vacancies? I'm available at half your salary!

  • lj.roos - 2012-10-21 21:38

    bla bla bla white people bla bla bla government bla bla bla black people.

  • pages:
  • 1