eBusiness Weekly
Seán Mfundza Muller & Mike Muller
Since late last year South Africans have, once again, been subjected to power cuts by the power utility, Eskom. The need for what’s called loadshedding – planned power outages – led to the recent resignation of Eskom’s chairperson and a flurry of concern about the current and future reliability of electricity supply. It has also raised questions about the lack of progress in resolving Eskom’s financial and operational crises since Cyril Ramaphosa became the country’s president in early 2018.
Besides the importance of electricity supply for ordinary people and businesses, the deluge of opinions and proposed solutions reflects a variety of corporate and political vested interests. One grouping is pushing for the removal of public enterprises minister Pravin Gordhan. It argues that the recurrence of loadshedding demonstrates his failure to fix the power utility.
Another has blamed the country’s energy minister, Gwede Mantashe. A line of argument against him is that loadshedding would have been avoided if he’d commissioned new renewable energy projects and allowed greater decentralised electricity generation by large businesses.
These claims contain significant weaknesses. And most solutions that stem from them have a fatal flaw: they don’t address the systemic problems facing Eskom, in particular its parlous finances.
The basic objective of charting a way forward for Eskom must be to ensure a reliable and affordable supply of electricity for households and firms. That must be done in a way that does not undermine the stability of public finances. And any costs must be spread as equitably as possible across individuals and businesses, minimising negative effects on other important social and economic objectives.
Finally, decisions about energy must contribute to reducing future carbon emissions, in line with international treaties. This needs to be done because it’s essential for the planet, and because international regulation will make it increasingly expensive not to do so.
