In years to come, I trust that South Africa’s current energy sector challenges will be looked upon as a fantastic case study into the unbundling of a monopoly.
Originally published in the ESI Africa weekly newsletter on 2019/02/13 – subscribe today
However, the country isn’t in a position to reflect on its market conditions just yet as it battles to stay ahead of impending disaster by implementing rotational loadshedding.
South Africans have become used to this ‘business as usual’ strategy by the utility but the severity of this week’s power cuts went from stage 2 to stage 4 with little warning for businesses and citizens to prepare.
The stages equate to the number of megawatts that the utility needs the country to shed, and is used as a measure of ‘last resort to protect the power system from total collapse or blackout. The fact that the country reached stage 4, which calls for 4,000MW to be shed, is frightening! How many mine workers had to remain underground for longer than their shift due to this?
It appears that Eskom is attempting to ‘dig their well during the dry season’ when this should have been done during a time of stability. It is clear that the power utility – a strategic resource to economic stability – has been operating in a reactive mode for far too long now.
In conversation with David Birungi from Umeme, he empathised with the utility: “The financing challenges, declining coal reserves, and
He also noted that wheeling charges should be negotiated during times of excess generation (recipient side). “Right now RSA would be in a weaker position.”
Do you believe that the unbundling of Eskom into three business units reporting to Eskom Holdings will deliver the desired results?
Read the previous note from the editor here.