Ramaphosa: Load shedding will be with us for ‘some time to come’

Ramaphosa said load shedding is implemented as a last resort to avoid a total blackout.

  • There are no easy solutions to load shedding, and steps include managing Eskom’s debt, overcoming a skills deficit and improving municipal revenue collection, says Ramaphosa.
  • The president said that proposals to deal with Eskom’s debt burden are being considered and a solution will be reach.
  • Ramaphosa said load shedding is implemented as a last resort to avoid a total blackout.

Load shedding will be a possibility for “some time to come,” said President Cyril Ramaphosa.

The president on Thursday was responding to questions from members of Parliament. In response to a question from DA leader John Steenhuisen about government’s plans to address the energy crisis, Ramaphosa noted that it is “”inevitable” as it is implemented to avoid a total collapse of the grid or blackout.

But government is working to address the “complex problem”.

Among the solutions include Eskom’s restructuring into three entities – generation, transmission and distribution – which are an important part of restructuring the electricity sector as a whole to allow new players in the generation space. Having more generators – including municipalities and independent power producers – will reduce the risk of having one entity having a sole monopoly in energy generation.

Other measures to introduce new participants in generation include lifting the licence exemption for generation facilities of 100 MW, as well as efforts to procure new emergency power and launching subsequent bidding rounds of the Renewable  Energy Independent Power Producer Procurement Programme.

There are many challenges to a secure and stable electricity supply, Ramaphosa said.

These include managing Eskom’s some R400 billion debt; overcoming the skills deficit in the country – when it comes to electricity provision; steadily improving municipal revenue collection; improving Eskom’s maintenance capabilities; and rooting out all forms of corruption and criminality at the power utility. Ramaphosa noted reports of sabotage, with Eskom’s pylons being cut.

Addressing concerns raised about Eskom’s leadership – its executive management and board – Ramaphosa said that leadership is a matter that is considered continuously. Ramaphosa said that Eskom’s management works with a number of blue-chip companies to service plants, which are old and tend to break often. Ramaphosa said he does not believe that leaders deliberately wake up to break down the power stations. “These [power stations] break down because they are aged.”

The Black Business Council recently called for the resignation of CEO André de Ruyter and Eskom’s board. But De Ruyter has said he has no intention to resign of his own accord.

“… I am appointed by the board of Eskom. The board is in turn appointed by the minister of public enterprises. If they have lost confidence in me then it is up to them to sever ties with me and request me to leave,” De Ruyter said previously.

Eskom debt solution

Ramaphosa also responded to questions about Eskom’s debt burden – which is the biggest among the country’s state-owned enterprises.

“We are now stuck with debt. Eskom is too big to fail. A failing Eskom would be catastrophic for our economy and for the lives of our people, all round,” Ramaphosa said. He added that Eskom is a “collective problem” to be solved. “It does not help us to sit and not do anything,” he said.

Non-government entities – such as business, trade unions and community -based organisations – have been discussing how best to deal with Eskom debt, the president said.

Ramaphosa told the National Assembly that he is pleased by the number of South Africans trying to find a solution.

“Government has been working with Eskom to find a way to deal with the debt. A number of proposals abound,” he said. This includes proposals that Eskom’s debt be taken on the sovereign balance sheet, or that a way be found to sell the debt.

“All these proposals are being looked at and we should be able to find a solution, because Eskom is too big to fail,” said Ramaphosa.

Earlier this week, Eskom’s chief financial officer Calib Cassim told the Standing Committee on Public Accounts that the utility proposed that government relieve it of between R150 billion and R200 billion of its debt. Labour unions have previously proposed a debt-for-equity swap – linked to Eskom bonds held by the Government Employees’ Pension Fund (GEPF). However the GEPF has said it has not been approached on the matter, Bloomberg previously reported.


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Publish date : 2021-11-25 15:10:45

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