The Es Kom Factor
-
Upload
ed-chikuni -
Category
Documents
-
view
223 -
download
0
Transcript of The Es Kom Factor
-
7/29/2019 The Es Kom Factor
1/16
The Eskom factor:
Power politics andthe electricity sectorin South Africa
Repo
rt2012
Based on the research report: The Electricity Governance Complex.Michael Koen of the Civil Society Research and Support Collective. 2012
-
7/29/2019 The Es Kom Factor
2/162 The Eskom factor: Power politics and the electricity sector in South Africa
For more information contact: [email protected]
Based on the research report: The Electricity Governance Complex.
Michael Koen of the Civil Society Research and Support Collective. 2012
Acknowledgements: Melita Steele, Nina Schulz, Fiona Musana, Michael Baillie
Edited by: Melita Steele, Nina Schulz and Fiona Musana
Published in June, 2012
Greenpeace Africa
10A and 10B Clamart House,
Clamart Road, Richmond
Johannesburg, South Africa
Postal Address:
Greenpeace Africa
PostNet Suite 125
Private Bag X09, Melville
Johannesburg, 2109
South Africa
Tel: +27 (0)11 482 4696
Fax: +27 (0)11 482 8157
Website: www.greenpeaceafrica.org
Designed by: Kai.Toma Creatives
Printed on 100% recycled post-consumer paper with vegetable based inks.
Cover photograph: Greenpeace/Benedicte Kurzen, 2011
Cover inner: Greenpeace/Oswald Chikosi, 2011
Back cover: Greenpeace/Benedicte Kurzen, 2011
1. Introduction 3
2. Historical, political and economic inuence of Eskom 5
2.1. Early Electricity Provision 5
2.2. The Minerals-Energy Complex 5
2.3. The Corporatisation of Eskom 6
2.4. The Post-Apartheid Transition period 1990-1994 7
3. Inuence and accommodation: Eskom and Government
Policy 1994-2001 9
4. Commercialisation of Eskom: 2001-2012 11
5. Eskom and Water 12
6. Conclusion 13
-
7/29/2019 The Es Kom Factor
3/16
3The Eskom factor: Power politics and the electricity sector in South Africa
Eskom Holdings Limited (ESCOM) is a household name
in South Africa, and has a long and inuential history in the
country, and on the African continent. Established in 1923 as
the Electricity Supply Commission ESCOM, the state-owned
utility1 is responsible for generating, transmitting and distributing
electricity to industrial, mining, commercial, agricultural and
residential customers. In essence, Eskom has an effective
monopoly in the electricity sector, which also places a
tremendous amount of responsibility in the utilitys hands.
Eskom has undergone some major changes from its origins
in 1923: the utility has seen periods of almost complete
autonomy, greater regulation, an oversupply crisis, rolling
blackouts, and massive electricity price hikes. The result is that
in 2012 the utility is almost entirely dependent on coal2,
remains most responsive to mining and large corporate
interests due to its central mandate of driving economic
development3, and continues to invest in large-scale,centralised electricity generation. However, the country
simultaneously faces a host of major development challenges,
exacerbated by the legacy and structures of apartheid.
These include a dramatic gap between rich and poor, lack of
infrastructure, high levels of urbanisation and unemployment,
extreme inequality and poverty, and huge backlogs in service
delivery to the majority of South Africans.4
But what is the real story behind Eskoms decisions? This
document seeks to outline Eskoms role in South Africa,
its evolution as a state-owned company, and its current
status as a key player in South African politics.
The investment recommendations and decisions made by
Eskom are particularly important, with wide-ranging impacts
for all South Africans. The utility has publicly acknowledged
the potentially negative impacts of climate change5 and the
need to reduce the coal content of the electricity generation
mix in South Africa. However, only a tiny proportion of Eskoms
electricity portfolio is currently contributing to this fundamental
solution that Eskom CEO Brian Dames refers to.
Of the utilitys 237,000 GWh total generation, the electricity
output from wind was only 2 GWh in 2010.8 Initially a
commitment was made to reduce coal reliance by 10% by
2012 at the 2002 World Summit on Sustainable Development
(WSSD).9 Instead, coal intensity has increased.
Carbon Dioxide (CO2) emissionsEskom is almost entirely reliant on coal. As a result,
according to the Carbon Monitoring for Action (CARMA)
database, in 2007 the utility was the second largest
power utility emitter of CO2 globally.10 11
Eskom states that it is necessary to double total capacity to
around 80,000 MW by 2025 to keep the lights on in South
Africa.12 In reality, the vast majority of this capacity will be used
by industry and will remain coal-based. Some 9,000 MW of
this will be provided by two of the worlds largest coal-red
power stations (Kusile and Medupi), both currently under
construction. However, the decision to invest in more coal has
signicant implications.
By building Medupi and Kusile power stations, Eskom
and the South African government have committed to
signicantly increasing South Africas annual emissions andcontribution to climate change, combined with substantial
health, coal mining and water use impacts.13 Kusile alone
will generate an estimated 37 million tonnes of carbon dioxide
(CO2) equivalent emissions annually, increasing the countrys
total contribution to climate change by an immense 10%.14
1. Introduction
1 Eskom is a State Owned Enterprise (SOE). In its current form this means it is a commercialised entity incorporated with the Government of South Africa (GOSA) as its sole
shareholder represented by the Department of Public Enterprises. The board is therefore accountable to public nance legislation in addition to the normal duciary responsibilities
relating to protability. This is a fundamental departure from the previous dispensation with regards to the legal character of Eskom where the mandate was to provide developmental
power for neither prot nor loss.2 Eskom. 2011. Integrated Annual Report 2011. Johannesburg: Eskom.3 Koen, M. 2012. Based on the unpublished research report: The Electricity Governance Complex. Civil Society Research and Support Collective.4 Winkler, H., Marquand, A. 2009. Changing development paths: From an energy-intensive to low-carbon economy in South Africa. Climate and Development1 (2009) 47-65.5 Eskom. 2010. Climate Change and Sustainability Department, Eskoms 6 point plan. Available: http://www.eskom.co.za/content/GI0004_6_POINT_PLAN~2~1.pdf.6 All of these gures come from Eskoms Integrated Annual Report 2011.7 As at 31 March 2011 (Eskom, 2011).8 Eskom. 2011. Integrated Annual Report 2011. p.324 Johannesburg: Eskom.9 Eskom. 2006. Annual Report 2006. p.74. Johannesburg: Eskom.10
Grant, L. 2007. Eskom comes second on world emissions list. Retrieved November 27, 2011, from Treevolution. Available: http://treevolution.co.za/2007/12/eskom-comes-second-on-world-emissions-list/.11 This status of second largest utility emitter is also referred to by (Makedi, 2011) in an Eskom presentation to the Renewable Energy Africa conference: Makedi, A. 2011. Eskoms
view on renewables. Presentation at the Renewable Energy Africa Conference. Retrieved May 15, 2012, from Renewable Energy Africa Conference. Available: http://www.reafrica.
co.za/Images/Presentations%20Day%201/Ayanda%20Nakedi.pdf.12 Eskom. 2007. Annual Report 2007. Johannesburg: Eskom.13 Greenpeace. 2011. The True Cost of Coal in South Africa: Paying the price of coal addiction. Available: http://www.greenpeace.org/africa/Global/africa/publications/coal/
TrueCostOfCoal.pdf.14 Ibid.
Eskom facts and gures6Eskom can quite rightly be described as a giant:
Ranked in the top 10 utilities in the world in terms of generation and sales;
Has 27 (including one nuclear) operational power stations;
Generates about 95% of the electricity used in South Africa, and over 40% of all electricity consumed in Africa;
Mining alone used 14.3% of Eskoms supply by 2011; and In 2011 had a net maximum capacity of 41,194 MW.7
-
7/29/2019 The Es Kom Factor
4/164 The Eskom factor: Power politics and the electricity sector in South Africa
GOOGLE MAPS - 2012 GOOGLE
Map: the location of the Medupi and Kusile coal power plants currently underconstruction in South Africa.
-
7/29/2019 The Es Kom Factor
5/16
5The Eskom factor: Power politics and the electricity sector in South Africa
2. Historical, political and economic influenceof Eskom
2.1.Early Electricity Provision
In 1923, the Electricity Supply Commission (ESCOM) was
founded.15 In line with the 1922 Electricity Act, ESCOM was
established as a relatively autonomous entity, not subject
to any form of parliamentary oversight, nancial controls
or state auditing. Importantly, ESCOM would produce and
supply electricity neither for prot or loss. In this context,
new generation and distribution capacity needed to be
created at the lowest possible cost. This was to be done
either through a new build programme or acquisitions to
facilitate a cheap and abundant supply of electricity.16
In pursuit of this abundant supply, ESCOM made
decisions with far-reaching economic consequences.17
However, because ESCOM was relatively independent of
government, with no accountable board, the utility tended
to align its objectives with the dominant electricity demands
of the mining companies from its earliest days.18
The continued accommodation of mining and industrial
interests was achieved as ESCOM grew into an absolute
monopoly by 1948. The rapid growth of industry after
this period meant ESCOM needed to constantly build
new capacity. During the period of massive economicgrowth in the 1960s, Eskoms expansion plans became
increasingly ambitious, and ever-larger MW units were
being commissioned. However, throughout the 1970s,
projects began to suffer from diseconomies of scale,
where the logistics and associated delays (and consequent
nancing costs) in fact increased the comparative price of
provision.19
By the early 1980s, decision makers realised that growth
predictions were wrong. Demand had been overestimated,
but it was too late: the building of new power stations
was irreversible, due to long lead times and cancellation
penalties. ESKOM responded in two ways, rstly by
mothballing aging plants20 and thereby saving on input
costs, and secondly by seeking new markets. Attempts to
create such markets included the provision of electricity
to black households, so-called homeland states and
neighbouring countries.21 An additional new market was
created through supplying electricity to the energy intensiveindustries, such as smelters.
2.2.The Minerals-Energy Complex
Historically, South Africa has followed a heavily capital
and energy-intensive development pathway, based
almost entirely on coal.22 This pathway has been driven
by resource extraction and the development of a connected
set of interrelated economic activities termed the Minerals-
Energy Complex.23 24 Eskom has been the cornerstone
of the Minerals-Energy Complex
25
, and in turn, theComplex has become central to the economy.26 This
Complex consists of mining, minerals processing, the
energy sector and linked industries. It is primarily based
on mining, and then on limited beneciation, underpinned
by the provision of some of the cheapest electricity in the
world.27
Eskom, a pivotal player in the governance of electricity, operates within a framework that is
largely dominated by the needs of mining and other large industries.
15
Conradie, S. a. 2000. A Symphony of Power. The Eskom Story. Johannesburg: Chris van Rensburg Publications (Pty) Ltd.16 South Africa.1922. Statutes of the Union of South Africa, Act no. 42 of 1922. Act to provide for the supply and control of electricity and for other purposes incidental thereto. Cape
Town: Government Printers.17 South Africa.1922. Statutes of the Union of South Africa, Act no. 42 of 1922. Act to provide for the supply and control of electricity and for other purposes incidental thereto. Cape
Town: Government Printers.18 Steyn, G. 2006. Investment and Uncertainty: Historical experience with power sector investment in South Africa and its implications for current challenges. 15 March 2006.
Retrieved March 12, 2012, from UCT graduate School of Business: http://www.gsb.uct.ac.za/les/Eskom-InvestmentUncertainty.pdf.19 The Eskom Integrated Annual report (2011, p.87) is for example at pains to point out that the current MW price of capacity in the new build process is in line with the international
build prices, be it at the upper end. This is probably in response to reports such as the Study of Equipment Prices in the Power Sector (World Bank, 2008) showing comparative
build costs in India, China and even some parts of the USA and Europe as cheaper than those of Medupi and Kusile. (see Yelland, C. 2011. Further cost increases on the cards
for Eskoms Medupi and Kusile power stations. Retrieved May 4, 2012, from ee publishers. Available: http://www.eepublishers.co.za/article/further-cost-increases-on-the-cards-for-
eskoms-medupi-and-kusile-power-stations.html).20 Steyn, G. 2006. Investment and Uncertainty: Historical experience with power sector investment in South Africa and its implications for current challenges. 15 March 2006.
Retrieved March 12, 2012, from UCT graduate School of Business. Available: http://www.gsb.uct.ac.za/les/Eskom-InvestmentUncertainty.pdf.21 As far back as 1980 Eskom reports, Similarly good progress was made providing electricity supplies to Black urban areas and the national states of Transkei, Bophuthatswana
and Venda. Plans for Escom to augment existing bulk supplies to Soweto, South Africas biggest black city are on schedule. ESCOM. 1980. Annual Report. p. 10 Johannesburg:
ESCOM.22 Winkler, H., Marquand, A. 2009. Changing development paths: From an energy-intensive to low-carbon economy in South Africa. Climate and Development1 (2009) 47-65.23 Fine, B., and Rustomjee, Z. 1996. The Political Economy of South Africa. From Minerals-Energy Complex to Industrialisation, London, Hurst.
24 Winkler, H., Marquand, A. 2009. Changing development paths: From an energy-intensive to low-carbon economy in South Africa. Climate and Development1 (2009) 47-65.25 Historically dened, the Minerals-Energy Complex is a system in which low paid labour was exploited, and cheap coal based energy with costs externalised to society was used to
support an accumulation regime of a few highly centralised rms focused primarily on capital intensive commodity based industrial activities and the export of basic commodities and
low value add products.26 Winkler, H., Marquand, A. 2009. Changing development paths: From an energy-intensive to low-carbon economy in South Africa. Climate and Development1 (2009) 47-65.27 Ibid.
-
7/29/2019 The Es Kom Factor
6/166 The Eskom factor: Power politics and the electricity sector in South Africa
The Minerals-Energy Complex has historically accounted
for the majority of South Africas electricity consumption
and emissions, contributing far less to GDP.28 This system
is based on the theory that in order to grow the economy,
it is necessary to have the large centralised baseload
production of electricity, which is distributed through a grid
to energy intensive users.29 Eskom holds signicant
referential30 and representational power within
important government departments, policymaking,
policy inuencing and regulatory bodies. This in turn,
institutionalises the Minerals-Energy Complex.
The South African economy is extremely energy intensive
compared to international standards31, with only a handful
of countries having higher intensities. In addition, South
African industrial energy efciency is on average signicantly
lower than in other countries.32 This is an important factor,
given that at the moment industry and mining consume
over 60% of the electricity produced in the country,
and the inclusion of commerce takes this gure to
almost 75%.33 Therefore, residential energy use makes
up a far smaller portion of nal energy demand than inother countries, and demand from poor households is even
smaller.34 Only 16-18%35 of South Africas electricity
is used by residential consumers, an outcome of the
energy intensive nature of the economy, and the extreme
income differential in the country.36
Furthermore, industrial prices are substantially
cheaper than average residential prices. Eskom has
made frequent reference to its industrial tariffs as the
cheapest in the world37, however residential consumers
pay signicantly higher prices.38 For example, secret price
deals between Eskom and the Australian mining companyBHP Billiton, are estimated at about 350% less than a
low income residential customer in 2008/9, and less than
half of Eskoms reported production price in the period.39
With an estimated 12.3 million South Africans still
without access to electricity40, clearly the focus on the
Minerals-Energy Complex has had an extensive inuence
on the provision of energy for households, commerce and
services.41 It has also undoubtedly had an inuence on the
fact that coal constitutes such a high proportion of South
Africas primary energy consumption, in fact the highest in
the world in 2003, followed closedly by China.42
As the layers of governance and planning increased from
1987, Eskoms accountability became even more unclear.
This lack of accountability makes it harder for society
to control the Minerals-Energy Complex. Eskom plays
a central role in this Complex, which serves to exploit
resources and externalise environmental and social costs
to society as a whole, while creating prots for local and
international corporations. It seems clear that a more
equitable, genuinely accountable system is required.
This means that the dominance of the Minerals-Energy
Complex and South Africas underlying electricity
generation and supply paradigm must be challenged.
Eskoms role in AfricaThe trade in electricity in Southern Africa is dominated
by sales to just three end users43, who in 2011 used
9,322 GWh, at an average cost of 22.6c/kWh. In
comparison, Eskom sold half that amount of electricity
to utilities in seven countries in the region at an average
cost of 50.8c/KWh.44 Eskom has been deeply engaged
in energy-related projects in Africa45, but following the
supply crisis in South Africa in 2007, the utility has
largely withdrawn from Africa, and is now only involved
in managing generation facilities in Uganda and Mali.
2.3.The Corporatisation
46
of EskomIn the middle of the 1970s, the global crisis in the capitalist
economy saw a signicant decline in growth, which led to
a change in global economic policy. This was the dawn of
the so-called neoliberal period characterised by the rule
of the market, deregulation and privatisation, decreased
spending on social services, the disappearance of the
28 Fine, B. And Rustomjee, Z.1996. The Political Economy of South Africa: From Minerals-Energy Complex to Industrialisation. Westview Press, Boulder, CO.29 Historically Eskom was created to centralise power supply in this paradigm. Residential access to electricity is a by-product and not the purpose of the current supply paradigm.30 Eskom has historically retained tight control over information and modelling processes often considered condential for commercial or competitive reasons. This has tended to
hinder open policy and scientic option debate around a number of key areas.31 Winkler, H., Marquand, A. 2009. Changing development paths: From an energy-intensive to low-carbon economy in South Africa. Climate and Development1 (2009) 47-65.32 Winkler, H., Marquand, A. 2009. Changing development paths: From an energy-intensive tolow-carboneconomy in South Africa. Climateand Development1 (2009) 47-65; Hughes,
A, Howells, M. and Kenny, A. 2002. Energy Efciency Baseline Study. Capacity Building in Energy Efciency and Renewable Energy(CABEERE). Report No. 2.3.4. Report No.
P-54126. p.52. Department of Minerals & Energy, Pretoria. Available: http://www.dme.gov.za/energy/efciency_projects.stm.33 Republic of South Africa, Department of Energy. 2010. South African Energy Synopsis2010. p.52 and p.66. Available: http://www.energy.gov.za/les/media/explained/2010/
South_African_Energy_Synopsis_2010.pdf.34 Winkler, H., Marquand, A. 2009. Changing development paths: From an energy-intensive to low-carbon economy in South Africa. Climate and Development1 (2009) 47-65.35 Republic of South Africa, Department of Energy. 2010. South African Energy Synopsis2010. p.52 and p.66. Available: http://www.energy.gov.za/les/media/explained/2010/
South_African_Energy_Synopsis_2010.pdf.36 Winkler, H., Marquand, A. 2009. Changing development paths: From an energy-intensive to low-carbon economy in South Africa. Climate and Development1 (2009) 47-65.37 See Eskom Annual Reports, 2001-2009.38 Koen, M. & Bahadur, A. 2010. Eskom: Business as Usual in Africa. Available: http://somo.nl/publications-en/Publication_3603/at_download/fullle.39 Ibid. p.79.40 International Energy Agency. 2011. World Energy Outlook, Access to Electricity. WEO-2011 new Electricity Access Database. Available: http://www.iea.org/weo/docs/weo2011/
other/Energy_Poverty/WEO-2011_new_Electricity_access_Database.xls; Parliamentary Monitoring Group (PMG). 2012. Integrated National Electrication Programme (INEP)
Implementation: Department of Energy, Salga, Eskom Brieng. 13 February 2012. Available: www.pmg.org.za/report/20120214-department-energy-salga-eskom-implementation-
integrated-national-elec.41
Winkler, H., Marquand, A. 2009. Changing development paths: From an energy-intensive to low-carbon economy in South Africa. Climate and Development1 (2009) 47-65.42 Ibid.43 These companies are however, not identied in Eskoms 2011 Integrated Annual Report.44 Eskom. 2011. Integrated Annual Report 2011. Johannesburg: Eskom.45 Libya, Zanzibar, Uganda, Nigeria, Mali, Mauritania, Senegal, Zambia, Mozambique, Namibia, Swaziland and Mauritius. And Eskom Enterprises has also participated in energy-
related projects in India and China.46 In this context, Corporatisation is dened as: to be inuenced by or take on the features of a large commercial business.
-
7/29/2019 The Es Kom Factor
7/16
7The Eskom factor: Power politics and the electricity sector in South Africa
ideas of the public good/community, and for much of Africa,
the implementation of Bretton Woods imposed structural
adjustment programmes.
The South African state started to adopt some neoliberal
principles47 after the economy failed to recover
signicantly through the 1980s.48 The role of the state
in the economy was deregulated and reduced. This was
done through various means, including privatising state
owned companies. ESCOM was not exempt from these
reforms. The de Villiers Commission in 198549 marks the
start of reform in the sector50: rst, corporatising and later
commercialising Eskom. During this process, a system
was established that continues to reect the contestation
between the government, vested business interests, and
Eskom management until today.
A new corporate body named Escom, replaced the
Electricity Supply Commission (ESCOM). The government
appointed the new Electricity Council to govern Escoms
corporate body, which was made up of major stakeholders
from business and the municipalities.51 The State Presidentappointed a chairperson.
In 1986, Chairman Maree summarised the new character of
Escom and its ethos of professional managerialism as the
only sure way to meet the challenges of electricity supply in
South Africa is to run Escom as a professionally managed
business undertaking.52
As part of the corporatisation, the 1985 and 1987
amendments removed the stipulation that electricity should
be supplied in the public interest [with] operations being
carried out neither for prot or loss.
53
This was replacedby consideration for consumer needs being satised in
the most cost effective way, subject to resource constraints
and the national interest.54 The name of the utility was also
changed to Eskom in 1987.
Eskom earningsIn 2009, the utility earned on average 24.7c for every
kWh it sold. By 2011, Eskom was earning 40.3c on
average55, and recorded a net prot of R13.2 billion
as at March 2012.56 Eskom has not paid dividends to
its shareholder, the government of South Africa, since
2008 because of its capital expenditure needs.57
The restructuring of Eskom resulted in an unmonitored
electricity pricing policy. Instead of ensuring parliamentary
oversight, the drafters of the new Act, who included
members of ESCOMs legal department, managed to insert
a clause that exempted Eskom from the requirement to
have a license issued by the ECB [Electricity Control Board]
and thus from having its prices regulated.58
Eskoms reluctance to submit its prices for government
regulation was at times met with resistance by industry.
When Eskom raised tariffs to pay for the heavy debts it had
incurred, this provoked industry and the mines to call for
tighter government control to force it to operate on business
principles. If this sounded contradictory, Eskom then raised
the alarm about politicians in the engine room even as
it maintained its occupation of the DME [Department of
Minerals and Energy].59 After a long period of relative
autonomy, the utility resented the new interference by
the state and tried to secure as much independence as
possible.
Eskoms corporate sense that it was a law unto itself waseven more sharply revealed as the political transition
began. According to its then boss, Ian McRae, staff feared
that the new ANC government would nationalise the
corporation.60 Consequently, Eskom selectively embraced
portions of the governments emerging policy. At the same
time, Eskom resisted the wholesale carving up and sale of
the organisation.
2.4.The Post-Apartheid Transition period
1990-1994
By the end of apartheid, the dominant Minerals-Energy
Complex combined with discriminatory race policies, had
devastated South African society. Freedom brought with
it expectations for change and a need for government to
deliver a better life for all.61 It was a political imperative
that government should deliver on this. At the same time
business had expectations of improved economic growth
and prots through the re-integration of South Africa into the
global economy. At rst, these seemed to be complimentary
objectives. But the reality proved to be completely different.
47 Gentle, L. 2009. Escom to Eskom: From racial Keynesian capitalism to neo-liberalism (1910-1994). In Electric Capitalism: Recolonising Africa on the power grid. (D. McDonald,
Ed.) Johannesburg: HSRC Press.48 Gelb, S. 1991. South Africas Economic Crisis. Cape Town: David Phillip, Publishers.49 de Villiers, W. d. 1985. Report of the Commission of Inquiry into the Supply of Electricity in South Africa.(Afrikaans). Pretoria: Government Printer.50 Conradie, S. a. 2000. A Symphony of Power. The Eskom Story. Johannesburg: Chris van Rensburg Publications (pty) ltd.51 South Africa. 1985. Statutes of the Republic of South Africa, Electricity Amendment Act, Act No. 50 of 1985. Pretoria: Government Printers.52 Escom.1986. Annual Report. p. 4. Johannesburg: Escom.53 South Africa. 1922. Statutes of the Union of South Africa, Act no. 42 of 1922. Act to provide for the supply and control of electricity and for other purposes incidental thereto. Cape
Town: Government Printers.54 South Africa. 1985. Statutes of the Republic of South Africa, Electricity Amendment Act, Act No. 50 of 1985. Pretoria: Government Printers; South Africa. 1987. Statutes of the
Republic of South Africa, Eskom Act, No. 40 of 1987. Pretoria: Government Printers.55 Eskom. 2011. Integrated Annual Report 2011. Johannesburg: Eskom.56 Business Day. 2012. Eskom prot rises 60%. Available: http://www.businessday.co.za/Articles/Content.aspx?id=174215.57 Dames, B. 2011. Presentation on Eskom Audited Annual Results Presentation for the year ended 31 March 2011. October 2011. Retrieved May 5, 2012, from Eskom.co.za.
Available: http://www.eskom.co.za/content/AnnualResultsnal~1.pdf.58 Eberhard, A. 2005. From State to Market and Back Again. South Africas Power Sector Reforms. Economic and Political Weekly, 10 December 2005 pp. 5309-5307.59 Hallowes, D. M. 2007. Peak Poison: The elite energy crisis and environmental justics. Johannesburg: groundWorks, p.33.60 Ibid.61 The slogan a better life for all became the mobilising call and campaign slogan in 1994 by the African National Congress.
-
7/29/2019 The Es Kom Factor
8/168 The Eskom factor: Power politics and the electricity sector in South Africa
Cheaper electricity for all: price deals and
electrication
Eskom took the initiative in 1991 and proposed a price
agreement with government to reduce the real price of
electricity by 20% by 1996.62 The Eskom Chairmans
review pledges, Eskom is sufciently condent of its future
business performance to undertake to its customers that
it will reduce the real price of electricity over the next ve
years by 20%.63
That the intended beneciaries would be the energy
intensive corporations of the Minerals-Energy Complex was
made explicit by Chairman Maree: This reduction in the
price of electricity will place many of our energy-intensive
customers in a much stronger position to compete on
international markets and thus stimulate the export of raw
materials and manufactured goods and encourage new
investment in energy intensive industries.64
The focus on the low-price of electricity also features inEskoms 1992 vision: Eskom is committed to being an
efcient and effective organization [sic], so as to be able to
make electricity available to its customers at the cheapest
possible price. It is also committed to making electricity
available to all in South Africa, who want it and can afford
it[emphasis added].65
However, the notion of who wants it and can afford it
meant that communities needed to pay for it. The income
requirement (cost recovery) needs of Eskom were very
clearly stated by Maree, It is therefore absolutely clear
that any electrication programme can only be achieved if
the community wants it and are prepared to pay for it. In
reference to the National Electrication Forum (NEF), which
was a broad consultative mechanism including communities,
he emphasised the notion of a negotiated process: It is also
clear that communities need to be involved in the planning
and provision of electricity to them.66
Inevitably, community consultation became sidelined
as the NEF consultation process became narrower and
more technocratic with the establishment of the Electricity
Working Group (EWG) consisting of representatives from
Eskom, ministries, and municipalities, but excluding labour
and other civil society formations.67 The EWG gave rise to agovernment-based committee, the Electricity Restructuring
Interdepartmental Committee. This committee then made
the recommendations forming the basis of the 1998 White
Paper on Energy Policy (which included measures such as
regional distributors, a shift to cost reective tariffs, and the
opening of generation to competition).
62 By 1996 Eskom had in fact reduced real prices by 67% from 1985. Available: http://heritage.eskom.co.za/heritage/Chairmen/Reuel%20Khoza.htm.63 Eskom.1991. Annual Report. Johannesburg: Eskom, p.5.64 Eskom.1991. Annual Report. Johannesburg: Eskom.65 Eskom.1990. Annual Report. Johannesburg: Eskom. p.1.66 Eskom. 1991. Annual Report. Johannesburg: Eskom. p.6.67 Greenberg, S. 2008. Market liberalisation and continental expansion: The repositioning of Eskom in Post Apartheid South Africa. In Electric Capitalism. Johannesburg: HSRC Press.
Greenpeace
/Oswa
ldChikos
i,2011.
-
7/29/2019 The Es Kom Factor
9/16
9The Eskom factor: Power politics and the electricity sector in South Africa
3.Influence and accommodation: Eskom andGovernment Policy 1994-2001
Eskom undoubtedly has a dual role. On one hand,
the utility can be seen as an extension of government
and its policy. On the other hand, Eskoms corporate
(and later commercial) logic led to a preservation of
its organisational position, and continued to facilitate
the accumulation of wealth within a framework of the
Minerals-Energy Complex.68
Due to the dominance of the Minerals-Energy Complex,
since 1987 South Africas underlying electricity generation
and supply paradigm has never been challenged.69
The reality is that the policy environment has become
increasingly confusing, and sometimes contradictory.
This, combined with overlapping roles and responsibilities
within the governance of the utility has deected attention
away from the underlying paradigm of large centralised(baseload) generation, serving energy intensive users at
the expense of both the environment, and peoples health
and access to energy.
The objectives of the post-apartheid government have
clearly inuenced the actions of the utility in many
fundamental ways. Transformations in terms of employment
equity, addressing past discrimination and, more recently,
broad based black economic empowerment, have all been
appropriately high on the states agenda. Similarly, it was
crucial that the discriminatory patterns of service delivery
be addressed post-1994.
While some of Eskoms actions were no doubt an
accommodation of the new governments developmental
needs, the utilitys growing commercial motivation also
played a role. The corporatisation of Eskom and a need
to soak up excess capacity through the creation of new
markets meant that many of the issues that would be central
for the new government already had an existing commercial
rationale within Eskom. The accommodation of government
needs can therefore been seen as the intensication of a
pre-existing commercial direction, rather than a reversal of it.
The role of electrication
The initial national electrication process was a clear
imperative for the new government and Eskom responded
accordingly, effecting 2 812 847 connections between 1991
and its commercial incorporation in 2001.70 71 Securing
former Black Local Authorities (BLA) distribution networks
meant that Eskom was able to ensure it remained relevant
during the transition by positioning itself to take on the
electrication backlog to predominantly black households.
To date, 4 050 968 homes have been electried since 1991,
based largely on a prepaid metering system.72
However, Eskoms electrication drive was based on the
commercial rationale that extending the domestic market
would improve income generation as well as independencefrom the state. But average consumption fell far short of
what Eskom assessed was needed to make the programme
commercially viable.73 74 People simply could not afford to
buy enough electricity to make this protable.75 Indeed,
providing large-scale electrication to a large proportion
of South Africas population since 1990 has actually had
relatively little impact on overall electricity consumption.
The addition of over three million new (primarily low-income)
residential customers between 1990 and 2004 only increased
Eskoms sales by approximately 4%.76
In April 2001
77 78
, the Department of Minerals and Energybegan funding the Integrated National Electrication
Programme (INEP) directly.79 Nonetheless, Eskom retained
a strong inuence over the process: Eskom personnel
were simply seconded to the Department. According to
Clarck (2007: 17) Macro [electricity] planning is currently
undertaken by the Integrated National Electrication
Programme Business Planning (INEP BP) Unit. Previously
housed within Eskom, this unit is now separate from it,
though most of its staff have been seconded, on ministerial
request, from Eskom.80
68 Hallowes, D. M. 2007. Peak Poison: The elite energy crisis and environmental justics. Johannesburg: groundWorks.; McDonald, D. 2009. Electric Capitalism: Recolonising Africa
on the power grid. Johannesburg: HSRC Press.; Koen, M. and Bahadur, A. 2010. Eskom: Business as Usual in Africa. Available: http://somo.nl/publications-en/Publication_3603/
at_download/fullle.69 McDonald, D. 2009. Electric Capitalism: Recolonising Africa on the power grid. Johannesburg: HSRC Press.70 Eskom. 2002. Annual Report. Johannesburg: Eskom.71 Nearly all of these new connections have used pre-payment technology customers buy tokens or top-up electronic cards to activate their electricity dispenser. Many connections
involve informal houses (shacks) and use pre-wired ready boards typically with a few lights and plug points.72 Eskom. 2011. Integrated Annual Report 2011. p. 182. Johannesburg: Eskom.73 The average consumption of 100 kWh fell far short of the 350 kWh Eskom assessed was needed to make the programme commercially viable.74 Clarck, A. 2005. Resource-based Technology Innovation in South Africa: Innovations in South Africas Off-grid. Johannesburg: HSRC Press.
75 In 2001 for instance, the average monthly revenue per prepaid customer was just R30. Source: Eskom Annual Report 2001.76 Winkler, H., Marquand, A. 2009. Changing development paths: From an energy-intensive to low-carbon economy in South Africa. Climate and Development1 (2009) 47-65.77 Eskom. 2002. Annual Report. Johannesburg: Eskom.78 Eskom, which had been funding the programme from tariffs to this point, was about to start paying taxes and dividends to government in its commercialised form (South Africa,
2001) and therefore argued electrication should come out of these payments.79 Hallowes, D. M. 2007. Peak Poison: The elite energy crisis and environmental justics. Johannesburg: groundWorks.80 Clarck, A. 2005. Resource-based Technology Innovation in South Africa: Innovations in South Africas Off-grid. p. 17 Johannesburg: HSRC Press.
-
7/29/2019 The Es Kom Factor
10/1610 The Eskom factor: Power politics and the electricity sector in South Africa
In more recent times, the pace of electrication has slowed
as a result of rising costs per connection and the level
of government funding for electrication. According to a
parliamentary brieng by the Department of Energy, Eskom
and the South African Local Government Association
(Salga), by 2012 there has actually been a decrease in real
terms of the electrication allocation.81 In addition, it was
reported that the INEP operational budget is not sufcient
to plan, implement and monitor projects effectively.82
At the same time, the South African government has an
ambitious timeline for establishing universal access to
electricity in South Africa by 2014. Eskom has raised doubts
about meeting this deadline, and in 2011, Eskom was
unable to meet its electrication target.83 The utilitys
current 10-year electrication programme does not cater
for universal access by 2014, but claims that a 2021/2022
timetable is more realistic. According to Eskom If this
programme has to be expedited, it will severely limit the
ability to execute the spend in other categories and increase
the operational expenditure due to increased connection
numbers84, once again highlighting the contested natureof this countrys electricity sector.
The governments managed liberalisation of the
electricity sector
In the late 1990s international globalisation trends meant
that the focus was not on whetherto liberalise, but rather
on how to liberalise the electricity sector.85 The South
Africa government had opted for what they referred to as
managed liberalisation.86 As a result of this approach,
the cabinet prevented Eskom from engaging in any further
generation capacity development from the time of the 1998
White Paper on Energy Policy, to 2004.89
In a speech to the Africa Energy Forum in 2001, Minister
of Minerals and Energy at the time, Phumzile Mlambo-
Ncguka, summarised the governments objectives thus:
The energy sector is being restructured in order to ensure
that we reduce the cost of energy, improve economic
efciency, attract local and foreign direct investment,
diversify energy resources for environmental reasons,
and ensure security of energy supply. This will ensure the
delicate balance between States imperative to spur on
economic growth and its social responsibilities...[In] order to
limit the expected upward pressure on electricity prices due
to Eskoms new dividend and tax payments status, there
is a need to build new generating capacity, to encompass
environmental considerations, and to reform the...[sector].
Government will ensure that these price increases will be
kept as low as possible, so that South Africa maintains its
competitiveness, cross subsidies for the poor, and free
basic services to bring relief to the poor.90
However, the states emphasis on social responsibilities
nevertheless meant that in practice those duties were
increasingly shifted to individuals. The large-scale
introduction of prepaid metering systems was one
outcome of this process. It ensured consumer discipline
with disturbing consequences: households would simply
cut themselves off when they could not afford to pay for
electricity. The potential social benets of extending
electricity access were therefore completely undermined.
81 Parliamentary Monitoring Group (PMG). 2012. Integrated National Electrication Programme (INEP) Implementation: Department of Energy, Salga, Eskom Brieng. 13 February
2012. Available: www.pmg.org.za/report/20120214-department-energy-salga-eskom-implementation-integrated-national-elec.82 Ibid.83 Eskom states this as one of the challenges: Not meeting the target of 158 430 overall electrication connections this year (149 914 made) in Eskom. 2011. Integrated Annual
Report 2011. p. 168 Johannesburg: Eskom.84 Eskom. 2011. Integrated Annual Report 2011. p. 180. Johannesburg: Eskom.
85 Koen, M. 2011. Theres an Elephant in the Room. Greenwash and Socialwash in Eskoms sustainability reporting. Durban: Working Paper. CSRSC.86 The partial privatisation of risks and the introduction of quasi-markets in the administration of benets under the strict control and management of the Government.87 Dames, B. 2011. Presentation on Eskom Audited Annual Results Presentation for the year ended 31 March 2011. October 2011. Retrieved May 5, 2012, from Eskom.co.za.
Available: http://www.eskom.co.za/content/AnnualResultsnal~1.pdf.88 CSRSC calculations, based on gures in Eskoms 2011 Integrated Annual Report.89 Department of Minerals and Energy. 1998. White Paper on Energy Policy. Pretoria: Government Printers.90 Mlambo-Ncguka. 2001. Politics of Electricity Sector Reform in South Africa: Managed Liberalisation and Developmentalism (2009-2014). Retrieved October 10, 2009, from Africa
Energy Forum. Available: www.researchandmarkets.com.
Eskoms electricity customersOnly 139 customers account for 34.9% of Eskoms total revenues87, however these customers generally pay less than
half what the majority of customers pay. In 2011, mining and industry customers paid an average of 36.2c/KWh, while
4.5 million direct residential customers paid on average 66.4c/KWh.88
Greenpeace
/Les
Stone,
2011
.
Greenpeace
/ShayneR
obinson,
2011
.
-
7/29/2019 The Es Kom Factor
11/16
11The Eskom factor: Power politics and the electricity sector in South Africa
4. Commercialisation of Eskom: 2001-2012
Following on from the Eskom Conversion Act in 2002,
Eskom was converted from a statutory body to a public
company (Eskom Holdings Limited), with the South
African government as the sole shareholder. A board
was then established, but was comprised almost entirely
by big business, with a handful of academics and a
sole representative of the DPE.91 The impacts of the
governments managed liberalisation approach are clear,
with the Eskom Conversion Act attempting to balance
the competing narrative of Eskoms developmental role
and the need for affordable electricity.92 In reality, these
competing interests have never been resolved.
Indeed, it was this approach that prevented Eskom from
investing in new capacity before 2004, and precipitated
an electricity supply crisis in 2007, which continues to
date, despite policy acknowledgement of the problem ten
years previously.93 The crisis in 2007 meant that Eskomwas told to accelerate building new capacity quickly, and
urgently began investing in a new build programme. This
programme consists almost entirely of new major coal-red
capacity (Medupi and Kusile) as a supposedly least cost
and proven technology solution. Thus, the earlier policy
immobility, followed by the urgency to seek solutions to the
supply crisis meant that the necessary space to develop
better alternatives was completely absent.
The National Energy Regulator (NERSA) became
operational in 2008, but given the monopolistic nature of
South Africas electricity market, the regulators dominantrole thus far has been to adjudicate Eskoms price
applications. The nature of these decisions has had the
effect of deecting accountability from both the state and
the state-owned enterprise.
Since 2001, government roles in the electricity sector
have become increasingly complicated with the following
departments involved in one way or another: The Department
of Public Enterprises, The Treasury Department, The
Department of Energy, The Department of Minerals, The
Department of Environmental Affairs and The Department
of Local Government.
In fact, by 2012 the contestation for control of
Eskom from different economic interests (including
the Minerals-Energy Complex and Eskom itself),
inappropriate governance and regulation structures,
role confusion and policy uncertainty have in fact
resulted in less accountability to the real owners of the
utility: the people of South Africa.
91 Greenberg, S. 2008. Market liberalisation and continental expansion: The repositioning of Eskom in Post Apartheid South Africa. In Electric Capitalism. Johannesburg: HSRC
Press.
92 South Africa.2001. Statutes of the Republic of South Africa, Eskom Conversion Act, No. 13 of 2001. Pretoria: Government Printers.93 Department of Minerals and Energy. 1998. White Paper on Energy Policy. Pretoria: Government Printers.94 Eskom. 2011. Integrated Annual Report 2011. p. 182. Johannesburg: Eskom.95 Eskom. 2011. Integrated Annual Report 2011. Johannesburg:Eskom.96 Labour Research Services. 2011. Bargaining Indicators for 2011. Cape Town: LRS.97 Koen, M. 2012. Based on the unpublished research report: The Electricity Governance Complex. Civil Society Research and Support Collective.
SalariesIn 2011, Eskoms CEO earned R478 000 per month(including bonuses).95 Compared to this, the median
minimum monthly wage in South Africa was R3162 per
month in 2011.96 Based on these calculations, the ratio
of the CEOs salary to a minimum wage income is thus
151:1.97
In 2012, South Africas electricity sector looks like
this:
An estimated four million households have been
connected to electricity since 199194, but these
connections are characterised by chronic under
consumption of less than 100kWh per month;
The social development potential of electricity has
been largely negated by cost recovery policies resulting
in disconnections and self disconnection through
prepaid metering systems;
Domestic consumption is still a fraction of industrial
consumption and poor households an even smaller
fraction of this;
Service related protests are common place and often
relate to electricity;
No signicant renewable sources of energy have been
developed; The carbon footprint of the utility continues to grow
substantially;
Dwindling water resources are further threatened by
technology choices;
Coal mining has boomed along with the negative
impacts of acid mine drainage and toxins;
Allegations of corruption in the award of tenders for
capital expenditure projects continue to surface;
Real prices for electricity reduced by around 67% over
20 years, and then have escalated by 300% in just a few
years;
A supply crisis in 2007 followed by scheduled outagesreferred to as load shedding resulted in large scale
economic harm and job losses;
Debt and spiralling prices limited the countrys ability to
respond to the global economic crisis;
A controversial World Bank loan has been sourced for
building additional coal-red generation capacity
(Medupi); and
Amidst these problems large bonuses continue to be
paid to the utilitys leadership.
-
7/29/2019 The Es Kom Factor
12/1612 The Eskom factor: Power politics and the electricity sector in South Africa
5. Eskom and Water
In a water-scarce country like South Africa, the
decisions taken around the consumption of water have
major implications. As a strategic water user, Eskoms
investment decisions do play a role in the equation:in
2011 alone, Eskom consumed 327.252 Ml of water.98 The
new power stations currently under construction (Medupi
and Kusile) are to be dry-cooled as part of Eskoms climate
change adaptation strategy and its claimed commitment
to the environment.99 Importantly, because both of these
power stations are being built in already polluted areas,
both stations will require the installation of a ue gas
desulphurisation plant, signicantly increasing the water
usage of these power stations.
But using dry-cooled technology is not a shift in Eskoms
strategy. Over 20 years earlier, Eskom had already opted
for dry-cooled technology in the previous build programme.
This was out of necessity as there were insufcient waterresources to support the intended power stations.100 The
annual report of 1983101 describes Kendal, Matimba and
Majuba stations as air-cooled based on lessons learned
from the smaller Grootvlei station that was already dry-
cooled, as not enough water could be found to service the
station.
These three stations were planned during a severe drought
in 1982/3. During this period, many existing power stations
were unable to run at capacity because of insufcient water
supply. It cost R100 million to augment water to the large
power stations during the drought, which was done throughemergency pumping schemes in the Eastern Transvaal. In
a demonstration of the Minerals-Energy Complex at work
in a crisis, the 1983 annual report describes the measures
taken, water affairs developed a scheme to augment the
supplies of water in the Eastern Transvaal by reversing the
ow of the Vaal River by pumping water up the river over
a series of seven weirs. The scheme was completed in
20 weeks at a cost of some R28 million, to which ESCOM
contributed R19 million and SASOL, another large water
user in the Eastern Transvaal the remaining R9 million.102
However, the lessons of the drought were quickly forgotten,
as the construction of Majuba in the late 1980s shows. In
1995 it was decided to go ahead with the last three units.
Costs had spiraled, as the coal reserve was far lower
than the geological survey had predicted. This meant that
coal had to be transported by road and rail, and Majubas
cost of generation was far higher than anticipated. As a
consequence, the last three units commissioned were once
again cheaper, water-inefcient, water-cooled options.103
It is often accepted that Eskom is the source of knowledgeand expertise in the electricity sector. However, the lessons
of the past are clear: demand projections can be wrong,
coal reserve estimation is far from exact and the nature of
South Africas water supply is incredibly fragile. Despite
this, Eskom continues to make the same decisions, and
potentially the same mistakes that it did in the past.
It is estimated that the hidden costs of Kusile could be as
much as Three Trillion Rand over its 50 year lifespan.104
The water impacts dominate these externality costs
approximately 70% of the external costs are water-
related
105
, and per unit of electricity produced, Kusile willuse 173 times more water than wind power would. Building
in inexibility, instability, and water uncertainty into South
Africas electricity system.
98 Eskom. 2011. Integrated Annual Report 2011. p.11. Johannesburg: Eskom.99 Eskom. 2006a. Annual Report. Johannesburg: Eskom.;Eskom. 2011. Integrated Annual Report 2011. Johannesburg: Eskom.100 Steyn, G. 2006. Investment and Uncertainty: Historical experience with power sector investment in South Africa and its implications for current challenges. 15 March 2006.
Retrieved March 12, 2012, from UCT graduate School of Business. Available: http://www.gsb.uct.ac.za/les/Eskom-InvestmentUncertainty.pdf.101 ESCOM. 1983. Annual Report. Johannesburg: ESCOM.102
ESCOM. 1983. Annual Report. p. 21. Johannesburg: ESCOM.103 Steyn, G. 2006. Investment and Uncertainty: Historical experience with power sector investment in South Africa and its implications for current challenges. 15 March 2006.
Retrieved March 12, 2012, from UCT graduate School of Business. Available: http://www.gsb.uct.ac.za/les/Eskom-InvestmentUncertainty.pdf.104 Greenpeace. 2011. The True Cost of Coal in South Africa: Paying the price of coal addiction. Available: http://www.greenpeace.org/africa/Global/africa/publications/coal/
TrueCostOfCoal.pdf.105 The report measured the scarcity value or opportunity cost of water.
Greenpeace
/LesS
tone,
2011
.
Greenpeace
/Jennifer
Bruce,
2012
.
-
7/29/2019 The Es Kom Factor
13/16
13The Eskom factor: Power politics and the electricity sector in South Africa
6. Conclusion
Eskom clearly plays an inuential role in South Africas
electricity, policy and regulatory environment. The utility
has staff seconded to numerous government bodies, and is
often called upon to offer technical, logistical and nancial
support to the government, as well as participating in forming
parliamentary opinion through various subcommittees.106
However, it is inherently difcult to analyse the sustainability
performance of a state-owned utility like Eskom.
The question becomes: to what extent does one focus
on Eskom itself, as opposed to the relevant government
departments, policy processes, parliamentary oversight,
and regulatory institutions? Drawing the lines as to where
Eskoms responsibility and accountability lies often proves
difcult, given that the utility occupies an effective monopoly
position in the absence of any real competition. Eskoms
shift in an increasingly commercial direction has had
two key consequences: while government oversight hasincreased, overall accountability has decreased. The
outcome is clear: a lack of genuine accountability for
Eskom, as well as the government. And this lack of clarity
works for both parties, in that they are continuously able to
shift responsibilities from one to the other pointing out that
it is not them making the decisions, or with the expertise.
Eskoms decisions have repeatedly conrmed the utilitys
commitment to the central paradigm of large scale centralised
generation and grid-based distribution to energy-intensive
corporations, which lies at the heart of the Minerals-Energy
Complex. Government holds a series of roles or spheresof inuence and accountability with regards to the utility.
These are, amongst others, that of shareholder, regulator,
policy creator and political patron. This leads to confusion
over accountabilities and the extent of strong directive
inuence and control by the state, introduces the possibility
for corruption, ad hoc interference, and most importantly, a
lack of accountability amongst all players.
As a result Calland and Pienaar107 make the comment
that Picking holes in the governance of electricity supply,
and energy policy more generally, is like shooting sh in a
barrel. Whether it is the development and sequencing of
key policy documents, the absence of proper stakeholderconsultation, leadership failure, or the lack of clarity about
intra-governmental roles and responsibilities, there are
more hooks on which to hang a public debate than in a
cloakroom.108
The results of a quarter century of electricity sector reform
have been excellent from the perspective of the mines,
banks and heavy industry. However, from a social and
environmental sustainability perspective, the results have
been deeply worrying. The Minerals-Energy Complex
remains central to the type of electricity investment Eskom
decides to make. Indeed, Eskom is at the heart of this
paradigm, and both promotes and benets from it.
But one thing remains clear: The ground-breaking
decisions South Africa needs to make today cannot
become the victim of play-offs in responsibility and a lack
of accountability. The question of Who is responsible
demands urgent answers in the face of an accelerated
climate crisis, the growing gap between rich and poor,
unacceptably high levels of inequality and unemployment,
lack of service delivery, lack of access to affordable
electricity, a potential water crisis, and the continueddominance of big industry and vested interests.
Continuing along South Africas current pathway is clearly
not going to address any of these problems. The countrys
electricity system relies on coal, large scale centralised
generation and decision-making behind closed doors. The
centrality of energy-intensive industries comes at the
expense of all South Africans, making prots for a
privileged few. Therefore, the dominance of the Minerals-
Energy Complex and South Africas underlying electricity
generation and supply paradigm must be challenged.
In the pursuit of a sustainable future, a major paradigm shift
is required. This means that it is time for real accountability
from the government, and from Eskom. The utility needs
to stop building new coal-red power stations, and
should instead invest in the substantial rollout of large-
scale and decentralised renewable energy projects. It is
also time for the Minerals-Energy Complex to become far
less central to the South African economy. A just transition
away from coal and towards renewable energy is required
to secure the countrys electricity supply, create jobs, ensure
energy access, and avoid a water crisis exacerbated by
catastrophic climate change. It is time for Eskom to nally
learn the lessons of the past. It is not yet too late.
106 A parliamentary subcommittee plays an oversight role of state owned enterprises while others focus on the development of policy and legislation in the areas that affect decisionsrelating to development, environment, energy etc.107 Calland is director of Idasas Economic Governance Programme, which convenes the multi-stakeholder Electricity Governance Initiative of SA (EGI-SA), and associate professor
in public law at UCT. Pienaar is senior researcher: public ethics and governance.108 Calland, R. A. 2009. Left in the dark, public could pay heavy price for decades. Retrieved May 2, 2012, from Business Day. Available: http://www.businessday.co.za/articles/
Content.aspx?id=88535http://www.businessday.co.za/articles/Content.aspx?id=88535.
-
7/29/2019 The Es Kom Factor
14/1614 The Eskom factor: Power politics and the electricity sector in South Africa
-
7/29/2019 The Es Kom Factor
15/16
15The Eskom factor: Power politics and the electricity sector in South Africa
Greenpeace Africas campaign to end SouthAfricas coal addiction
South Africa is among the highest emitters of carbon dioxide in the world, and burning coal is one of the primary
sources of these emissions.
Currently, more than 90% of South Africas electricity comes from coal. Eskom continues to insist that coal is thecheapest source of electricity, and is investing in two mega new coal-red power stations.
The reality is that there is no future in coal. The true cost of coal is destruction at every step, and coal-red electricity
production uses massive amounts of scarce water, creates prots for a privileged few, has failed to deliver electricity
to over 12 million South Africans, and destroys peoples health and wellbeing.
Greenpeace Africa campaigns for an Energy [R]evolution to end South Africas addiction to dirty and risky coal and
nuclear energy, replacing them with renewable energy and energy efciency.
If the country commits to this option, we can phase out coal in a just transition over the next 40 years, tackle energy
poverty and avoid catastrophic climate change. This will mean that half of South Africas electricity could come from
renewable energy by 2030, and an estimated 150 000 direct jobs could be created in the energy sector in less than20 years.
To achieve this goal, Greenpeace campaigns for Eskom to stop the construction of Kusile to prevent its massive
environmental, economic, and social impacts. By building new coal-red power stations, Eskom and the South
African government are locking the country into a dirty, expensive future. Instead, Eskom must become genuinely
accountable to the people of South Africa by investing in the substantial rollout of large-scale and decentralised
renewable energy projects.
The True Cost of Coal is simply too high for South Africans to continue to pay.
-
7/29/2019 The Es Kom Factor
16/16
RSA Ofce:
10A and 10B Clamart House, Clamart
Road, Richmond, Johannesburg,
South Africa
Postal address:
Greenpeace Africa
PostNet Suite 125
Private Bag X09, Melville
Johannesburg, 2109
South Africa
DRC Ofce:
Greenpeace Environnemental
Organisation 8, avenue lodja, Q.
Socimat Commune de la Gombe,Kinshasa,
Rpublique Dmocratique du Congo
Senegal Ofce:
2, Avenue Hassan II, 6eme etage,
Dakar, Senegal
www.greenpeaceafrica.org
Greenpeace exists because this fragile
Earth deserves a voice. It needs solutions.
It needs change. It needs action!
Greenpeace is an independent global
campaigning organization that acts
to change attitudes and behavior, to
protect and conserve the environment
and to promote peace. It comprises of
28 independent national/regional ofces
in over 40 countries across Europe, the
Americas, Asia, the Pacic and Africa
as well as a co-coordinating body,
Greenpeace International.
Greenpeace has been working in Africa
to end environmental destruction and
ghting for the right of Africans to a
healthy environment since the early
1990s. Our campaigns focus on climate
change, halting the destruction of tropical
forests and preventing the degradation ofmarine ecosystems.
Greenpeace
/Bene
dicteKurzen,
2011
.