Cape Town – Eskom is effectively broke and needs further interventions to be turned around before its risk to the economy is reduced.
This is the view of Anton Eberhard, a senior scholar at UCT who directs the Power Futures Lab at the Graduate School of Business.
He is also the chair of a presidential task team hoping to resolve some of the serious financial and technical challenges at Eskom.
Eberhard, whose task force is to make recommendations on the restructuring of the power sector, was speaking at a session on power strategy and development at the 2019 edition of the African Utility Week and Power- Gen Africa at the CTICC on Tuesday.
“Now is the time to restructure Eskom so that we are not faced with endless bailouts and so that competition and investments are accelerated," he said.
"Accelerated innovation in disruptive power technologies, services and markets is shifting and upending relative prices, resource shared, as well as the location and pattern of energy production and use.”
Eberhard pointed out that Eskom’s performance had deteriorated between 2007 and 2018. He said that while revenues had increased, electricity sales had dropped.
During his State of the Nation Address in February, President Cyril Ramaphosa unveiled a plan to unbundle the troubled state-owned enterprise. This would involve splitting Eskom into three business units, one for power generation, another for transmission of power and a third for the distribution of power.
Earlier, Energy Minister Jeff Radebe delivered the conference’s opening address. He spoke about the integrated resource plan (IRP), which he said would set out South Africa’s future energy mix.
“Cabinet approval for the IRP will define a tangible plan for energy security that also enables the participation of independent power producers side by side with Eskom,” he said.
The minister added that while South Africa was moving away from its dependence on coal-fired power stations in order to reduce its greenhouse gas emissions, this would be done in a way that did not impact negatively on jobs and local economies.