One afternoon not long ago, so a modern South African joke goes, the Devil took a stroll down the main streets of Cape Town. With his horns, cape and red skin, he naturally expected to be the centre of attention. He was therefore quite disappointed when the locals seemed to continue with their business as though he wasn’t there.
Eventually, he pulled a passer-by over and asked him, “Do you know who I am?” The fellow, a little ruffled by this eccentric intruder, replied, “No. Who the hell are you?” The Devil, satisfied to finally have the interest of at least one person, puffed up his chest and proclaimed, “I am the Prince of Darkness!” To which the Cape Town resident responded, “Ahhh, so you are the CEO of Eskom?”
I hate explaining jokes, but this one, alas, does require a little bit of context.
You see, Eskom is the national power utility of South Africa. It runs most of the country’s large power stations, high voltage transmission lines, and distribution to all end users. It is a massive company, with a long history. Lately, however, it has been delivering more darkness than light.
Through 2022, Eskom intentionally cut power to users on 208 days. The blackouts were occasioned by the practice of load shedding, a standard power management technique whereby power grid operators drop supply to some users in order to avoid total grid collapse caused by too much demand, which would take days or weeks to fully recover from.
Load shedding is supposed to be a temporary solution to reduced power supply or unprecedented demand. However, with the exception of 2016 and 2017, Eskom has implemented load shedding at scale every year since January 2008, when the grid came perilously close to total collapse. Back then, Eskom promised that it would bring new capacity online, and therefore rein in the problem, in five years.
Fourteen years on, the situation is the worst it’s ever been, and only seems poised to get worse. It has gotten so bad that, in a recent appearance on the BBC’s Hard Talk programme, Fikile Mbalula, the chairman of the African National Congress (ANC), South Africa’s ruling party, opined that the country risked becoming a failed state, and the ANC losing the government, if the power cuts continue.
He wasn’t being unnecessarily dramatic. The electricity supply woes have ravaged the country’s economy, which is now losing US$52 million dollars a day, according to government estimates. It has even prompted the South African Reserve Bank, the country’s central bank, to revise its 2023 growth forecast down from 1.1 percent to 0.3 percent.
Additionally, the unreliable power grid is denting South Africa’s image and reputation as an attractive investment destination on the continent. Though it remains Africa’s most developed major economy, the odds of it backsliding and collapsing aren’t zero, and they keep mounting.
The technical cause of the fickle power supply in the country is simple: generation can’t keep up with demand, mainly because the large power plants which handle the country’s base load, most of which are coal-fired, are woefully old (with a combined age of over 40 years) and ill-maintained. The solution, likewise, should also be simple: just build more power stations, and maintain the existing ones better.
However, given that the problem exists, it clearly isn’t that simple. Experts have offered multiple possible reasons why. For instance, prior to the near-grid collapse of 2008, South Africa had the cheapest power tariffs in the world. This, naturally, contributed to an extremely energy-inefficient economy, while at the same time discouraging foreign investment into the power sector.
Another potential reason is that the expansion of the grid to reach the underserved black majority after the end of apartheid in 1994, as well as growth in demand from other sectors of the economy over the same period, was not matched with an expansion of generation capacity, despite repeated warnings from experts around the turn of the century.
Some pundits have chalked up this failure to a heedless insistence on decarbonising South Africa’s grid, which is one of the most coal-dependent in the world (45 GW out of a total installed maximum capacity of 55 GW). This is certainly a factor. There has indeed been a constant insistence on expanding the share of renewables in the country’s power mix, and the country hasn’t opened a new coal mine in 18 years.
But it isn’t the main factor at all. Not only does it remain a major coal exporter (especially to Europe), the country has, in fact, built two new large coal-fired power stations. These facilities, Medupi and Kusile, should have added 9600 MW of installed capacity to the grid, effectively ending the need for load-shedding. Instead, they’ve been so plagued by construction cost overruns and technical failures that they can’t reach their full potential until the end of 2023, if at all.
Allegations of corruption have also been made against Eskom and the ANC, the ruling party. In an explosive recent report, the BBC detailed how the company has been captured by rival cartels that compete for maintenance contracts, resorting to violence and sabotage, under the aegis of corrupt ANC members. Last December, the CEO, Andre de Ruyter, was poisoned, prompting his resignation and exile.
The ANC has denied all accusations of involvement in the corruption. In a parliamentary hearing on May 17, prompted by revelations of corruption made by the exiled de Ruyter, Pravin Gordhan, the minister of Public Enterprises, declared that the ANC has “very honest, dedicated activists who want the public interests to be primary and who want this country to work.”
Yet another compounding reason for the perennial blackouts is that Eskom is under-financed and therefore unable to make long-term investments. The company’s debts have crossed US$20 billion, and it hasn’t made a profit in years, despite increasing its tariffs several times. It is also plagued by incompetence and skill gaps, hence the multiple failures to build and maintain infrastructure.
I could list many more reasons, but I believe the point has been made. South Africa’s electricity sector is broken, and all attempts to fix it – real or imagined – have failed so far. Now, as the country enters the southern hemisphere winter, when elevated heating demands will place even more strain on the fragile grid, there are legitimate fears that the grid might finally collapse, plunging the country into civil chaos.
It is highly unlikely that it will come to that, but the alternative, more intensive load-shedding in the depths of the cold, won’t be much better. But the worst part of this whole story is that this didn’t have to happen. South Africa has abundant energy resources and had a massive head-start on its infrastructure.
Of all the countries in Africa, it should be the last one struggling to keep the lights on. But it is, and, however much it dances around the issue, the ANC brought the country to this pass. Perhaps it’s time for a change.
Loading ...