South Africa, bounded by the South Atlantic Ocean and the Indian Ocean, is an African leader in many respects. The Rainbow Nation is responsible for 12% of economic activity on the continent, accounts for 30% of electricity demand in Africa, and produces 229 gigawatt hours of power annually. The second-highest producer of electricity in Africa, Egypt, generated about 183 gigawatt hours in 2019. Excluding South Africa, the average electricity used in sub-Saharan Africa is a paltry 150 kilowatt hours per capita.
From a continental lens, South Africa is exceptional, but that perspective is deceptive. In reality, the South African power sector is in distress. Outages are a regular occurrence, costing the nation $1 million for every hour power supply is disrupted. Eskom, the country’s sole and state-owned power utility, is in debt to the tune of $25 billion. The utility has repeatedly failed to stop rolling blackouts and is plagued by incompetence that has resulted in more power plants failing or being taken offline when they should have been functioning.
That South Africa leads Africa in power generation despite the troubles facing Eskom is an almost-criminal indictment of the state of energy on a continent blessed with abundant resources.
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Eskom’s woes begin with the familiar negligence of government. In 1998, South Africa’s Department of Minerals and Energy published a report that projected that electricity demand would exceed then–current capacity by 2007 unless the government revised the country’s energy plan and built new power plants. “For an assumed demand growth of 4.2%, Eskom’s present generation capacity surplus will be fully utilised by about 2007,” the white paper warned.
The government paid little heed to the warning, and right on schedule, in late 2007, Eskom began routine “load-shedding” to manage electricity demand.
To resolve the problem, the South African government has successively blown hot and cold about potential fixes, with the latest being the dramatic (to put it lightly) proposal by the country’s president President Cyril Ramaphosa to incorporate a second state-owned power utility. Echoing mineral resources and energy minister Gwede Mantashe’s thoughts on the matter, the president claimed that “having one company taking up the role of providing energy to the entire country poses a great risk.”
“We are today witnessing the great risks associated with placing sole responsibility for electricity generation in one company and that is why when comrade Gwede flighted the idea of saying, ‘Why not a second one [power utility] which can be owned by the government?’ and I said, ‘I think that’s not a bad idea’,” the president said.
A day later, in what some have called a soft retraction, the president, while on a visit to the Tutuka Power Station, declared, “What we now need to do is to reposition Eskom and make sure that we generate enough energy for the country.”
This eternal vacillation also manifests in South Africa’s approach to renewable energy. Several experts have outlined how sustainable resources can be leveraged to shore up and eventually take over electricity production in South Africa. And while the government’s websites and policy papers agree in principle, the reality stays different. For example, Eskom recently announced plans for cost-reflective tariffs, which could see solar photovoltaic (PV) users pay as much as R900 more when they do use Eskom services. The move has roundly been denounced as a fine on solar energy users.
Disincentivising renewable energy use (Eskom has denied that it means to) and capping the independent power producers procurement programme to 100MW is hardly encouraging, to say the least—more so when expert opinion holds that investing and incentivising renewable energy is one of the paths to solving the energy crisis in South Africa.
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Moving “government” to the backseat
This mismatch between reality and government policy is one piece of Africa’s energy paradox.
Africa, despite having substantial renewable energy potential, is neither able to tap renewables nor draw on its vast fossil reserves to adequately provide its energy needs. Similarly, South Africa, despite having renewable, fossil and nuclear energy potential that far exceeds its current production, is mostly stumbling along the path to energy transition—and it is the continent’s energy leader!
Instead of diving headlong into recommendations to stop the endless load-shedding South African homes are subject to, the actual problem to be solved is getting the politicians to take the back seat and leave directing energy policy to the experts. For example, if government and the bureaucratic baggage it travels with had played a much more muted role in how energy policy is formulated and executed, South Africans may have been spared the presidential debacle of planning a second state-owned utility to fix the problems caused by the existing state-owned utility. Independent technicians would also be less-inclined to cap private energy production in order to protect less-reliable networks.
It may mean fewer (and artificial) political limits on how South Africa’s energy crisis is resolved, but ultimately it is the best option for South Africans.
From the Cabal
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|Abraham Augustine, Senior Writer, TechCabal.|