Estimated reading time: 5 minutes
An unbelievable history of mismanagement and poor service delivery funded by government bailouts, dare I mention loadshedding, has resulted in Eskom not being the popular topic of conversation.
However, there is positive progression. Thanks to the current leadership, numerous unsung truths are being brought to light, with Eskom actively pursuing feasible options.
But what does the future hold for this faulty SOE? Is there any light at the end of the tunnel?
Speaking at a Newcastle Sakekamer event on Wednesday evening, 3 October 2021, guest speaker Jan Oberholzer, Chief Operating Officer of Eskom, discussed the company’s reality.
Oberholzer began by informing the audience that Eskom is currently in the process of unbundling. This follows President Cyril Ramaphosa’s announcement of the move during his 2019 State of the Nation Address.
This will result in Eskom being divided into three wholly-owned entities, namely:
- Generation
- Transmission
- Distribution
According to Oberholzer, this process will allow them to operate independently of one another. Each entity will have its own board of directors and managing directors.
While all three divisions will be able to operate autonomously, they must still adhere to the functional leader operating model,
Oberholzer says, “When I returned to Eskom after 10 years in the real world, I realised that whatever we do, Eskom needs to be competitive, profitable, and sustainable.”
The unbundling process will assist the state-owned enterprise in accomplishing this. According to Oberholzer, Eskom has already begun transmission.
But where will we be in 10 years with this process?
Consumers, according to Oberholzer, will have a significant say in what an electricity company like Eskom should be.
Furthermore, the unbundling process will alleviate many of the current challenges, as the heads of each unit will face severe consequences if they do not follow the proper procedures.
Oberholzer also believes the government will keep the transmission unit close to monitor consumer demands and electricity consumption. As a result, they will be able to see where they can improve.
Addressing Eskom’s Issues
The power utility faces three major challenges: procurement, a lack of experienced staff, and a lack of capacity. These difficulties have a knock-on effect on South African households.
Oberholzer explains that several financial issues can be resolved if Eskom can gain sole control of its procurement. This includes locating the best maintenance teams and parts for the jobs at hand, reducing costs, and combating corruption.
Oberholzer declared that procurement issues could be seen even in the purchase of simple items.
Kneepads that typically cost R80 were purchased for R80 000. Additionally, Eskom paid R248 000 for a mop and R54 for a single refuse bag.
As a result of gaining control over procurement, the power utility can cut costs where necessary and ensure that shady dealings do not hamper the maintenance of power facilities.
In terms of capacity, Oberholzer explains, “The available capacity for the country is not sufficient. In December 2019, when we had stage 6 loadshedding, I met with both the President and Deputy President, as well as two of their ministers.”
During this meeting, Oberholzer stated that he informed President Ramaphosa that Eskom needed more capacity to function correctly. Eskom required 4000 to 6000 MW at the time.
While this additional capacity is not yet available, Eskom is currently performing maintenance on its power plants. Seven have already been serviced, and more are on the way.
Despite this, Oberholzer stated, “We have a number of units, some of which are unreliable, and we need extra power in case one of these has a problem.” Furthermore, the Eskom COO stated that he and Eskom CEO Andre de Ruyter will hold a media briefing next week to explain how they will address their capacity issue.
Oberholzer explains that losing experienced employees is also a major issue that he and de Ruyter have discussed.
One of the main contributors to the power utility’s problems, according to reports, is a lack of experienced employees. Indeed, Oberholzer claims that one of the major causes of the Medupi Power Station explosion was a lack of skilled personnel.
Oberholzer and de Ruyter are reportedly looking into ways to address this, which will benefit Eskom.
Discussing loadshedding and renewable energy in South Africa
Oberholzer, the man who makes the decision to implement loadshedding, describes the decision as emotional. However, he emphasises that with steps being taken to implement renewable energy, this will gradually become a thing of the past in the future.
However, he emphasised the importance of considering nuclear power as well. “The problem with renewable energy is that the sun does not shine 24 hours a day, nor does the wind blow 24 hours a day.”
Clean energy is a new business unit established by Eskom. This will look at innovative ways to implement renewable energy to keep power running while reducing the massive pollutants that Eskom is currently pumping into the air.
Taking care of illegal connections
Illegal connections are a significant source of contention for Eskom. In fact, three Eskom contractors were fired in October for their involvement in this criminal act, according to Oberholzer.
At the time, the power utility estimated that electricity theft cost the company nearly R2 million per year.
Furthermore, Oberholzer explains that with this in mind, Eskom is taking a tough stance against perpetrators. Residents who make illegal connections will be fined, and their power will be turned off until the fine is paid.
He concluded by emphasising that, while Eskom was not perfect, they are working diligently to resolve the issues at hand.
What are your thoughts on this? Share your thoughts in the comments section below.
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