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Eskom needs to stay relevant, not only for South Africa but also for the SADC region at large; therefore, “we need to ensure that Eskom is run sustainably, so that it remains relevant for the next 8 to 10 years,” stated Neeraj Mense from Frost & Sullivan during our live webinar last week.

Originally published in the ESI Africa weekly newsletter on 2019/07/03

ESI Africa, in collaboration with African Utility Week and POWERGEN Africa, hosted a power strategy webinar to address concerns around the way forward for South Africa’s energy future.

You can access the full recording and presentations here.

Apart from India-based Neeraj, the panel included Nhlanhla Ngidi from SALGA, VuVu Mahanyele from General Electric, and Silas Zimu from Africa Energy Corporation.

Each is an expert in their respective fields, but all agree that the three trends of transformation (digitalisation, decarbonisation, and decentralisation), cannot be ignored any longer. 

Nhlanhla pinpointed Eskom’s main challenge being at the distribution level and, eluding to the transformation of the market, added: “The business models still have to define a relationship with the new Eskom unbundled entity.”

However, Silas warned that because South Africa’s distribution industry is “very weak”and unbundling of Eskom is going to “expose the distribution industry” to many risks.

Responding to an audience question on “What can municipalities implement to avoid transferring the costs of embedded generation onto consumers?” Nhlanhla commented that the whole electricity distribution sector is experiencing rapid structural and behavioural changes.

“A more customer-facing role for municipalities to generate income from the energy transition is to provide energy advisory services such as energy audits and management,” he advised. However, Nhlanhla stressed that there is a lack of capacity and skills for planning, project management, and contracting.

Vuvu spoke on the movement towards a digitally enhanced system with low-carbon centralised and distributed technologies. On the various factors influencing the country’s power strategy, she stressed: “Whatever our energy mix, we need to remember that South Africa has a strong development agenda,” adding that “there is definitely place for gas in our energy mix,” since LPG and LNG will “always be significantly cheaper than diesel.”

In closing, Silas asked why technology hasn’t been embraced to solve some of our fundamental issues: “Street lights are on during the day and off at night – there are technologies that can automate this!”

During the live broadcast, we asked the audience: Do you believe that Eskom will be formally declared bankrupt within 12 months, negating the proposal to unbundle the sector?

The majority, 73% of listeners tuned in, responded ‘no’. President Ramaphosa’s State of the Nation Address, which took place just one week earlier, likely influenced this poll. In true Ramaphosia style, he proposed to “save” Eskom and deliver a stable electricity market.

In whatever form Eskom finds itself in the next decade, the focus must be on the right energy mix where local conditions, down to municipal level, are taken into consideration. It is not solely up to the government to solve the issue alone. Industry stakeholders must get involved to ensure that Eskom stays part of the solution to providing a sustainable energy future.

Our next webinar addresses how mining companies can reduce their reliance on grid-connected power. Book your seat for Gridlocked taking place on 18 July.