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‘Eskom must show there are consequences for corruption’

Kusile Power Station in Delmas, Mpumalanga. Source: Wikimedia Commons.

This material belongs to: The Sunday Times.

Former finance minister Nhlanhla Nene and other experts have spoken out about the problems afflicting Eskom during a panel discussion in Johannesburg.

Piet van Staden‚ chairperson of the Energy Intensive Users Group of Southern Africa‚ said Eskom must show there are consequences for corruption and state capture.

“We need to get this state capture‚ corruption things‚ out in the open.”

Van Staden was one of the panelists in a discussion about the power utility at the University of Witwatersrand Business School in Johannesburg.

According to Professor Rod Crompton‚ director of the Wits Business School Energy Leadership Centre‚ research has found just more than one in four South Africans (26%) will not source their energy from Eskom by 2030.

Van Staden said this will eat into Eskom’s sales and change who their customers are.

“By the time the Kusile unit is available‚ you may not be able to follow the rapid change in demand required due to renewables in the grid‚” Van Staden said.

“The new capacity [of Eskom] is coming on the market at the exact time when the whole landscape is being changed.”

Nene said Eskom needs “some serious surgery” but the power utility is “too critical and central to our economy to be allowed to fail”.

Deon Joubert‚ who works on economic regulation at Eskom‚ said one of the problems in South Africa is municipalities who buy about 42% of Eskom’s energy and sell it to residents at higher prices.

“You have an artificial mechanism that is stimulating the switching [to other power sources].”

He said Eskom cannot be fixed in isolation and needs good management‚ and government policy and regulation.

Thembani Bukula‚ chief executive of POWERX and former regulatory member at the National Energy Regulator (Nersa)‚ said policies were made on the assumption that Eskom was going to fund itself.

“It assumed an efficient and a prudent operator. Something that Eskom has proved not to be.”

Bukula said Eskom must rely on their infrastructure as their core business.

The audience applauded when Bukula said: “The kilowatt hours business is not their business. It has gone past them.”

Nene said it would be a “welcoming development” if government started listening to industry expertise‚ which he believes does not exist within the current administration.