Eskom in the spot-light - MANCOSA


Eskom in the spot-light

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South Africans have come to love to hate Eskom. We have all experienced load-shedding in recent times. This has become a major problem for house-holds and a serious financial blow to businesses. We have experienced almost a month without load shedding. “Bar unforeseen events, there should also be no further load shedding until May next year…” says Eskom acting CEO Brian Molefe in a recent press announcement. Eskom is busy with major developments with maintenance and new developments at Koeberg, Medupi and Ingula. President Jacob Zuma addressed Parliament in May this year stating that electricity demand would exceed supply for the next 24 to 36 months. He was of the view that the problem would continue for 3 years. He went on to say “that apartheid was the cause of the electricity supply problem‚ Eskom added 160‚000 households to the grid in the past financial year‚ which added to the demand for electricity.”

Eskom uses thermal energy to generate the electricity required. They achieve this buy burning coal to heat water and produce steam which is used to turn turbines and create energy. The main demand peaks usually occur at about 06:00 in the mornings and lasts until about midday. A second peak period is normally from about 17:00 until 21:00. According to the department of Energy “South Africa supplies two-thirds of Africa’s electricity and is one of the four cheapest electricity producers in the world.“

Eskom has managed to get commitments of R72.4 billion of funding for this year. This exceeds the immediate need of R55 billion it requires for capital and operational expenditure. In the medium term there is still a requirement for R110 billion. Eskom receives revenue from the sale of electricity to the Municipalities, they in turn on sell this to the individuals and companies. They also engages in a massive drive for loans in the bond market and look to government for further funding. Our national budget is in excess of R1 trillion. If government were to address all the needs of Eskom in one particular year, it would mean that our taxes could go up or that we would see a reduction in spend on other budget items.

Eskom has been a most generous employer spending R50 million on executive salaries with a total of R1.4 million per executive, remember during this period many south Africans experienced patchy electricity delivery. Over and above these huge salary payments a further R10.8 million has been paid out for long-term incentive bonuses. Currently the Utility is being lead by an acting CEO Brian Molefe the Public Enterprises Minister Lynne Brown has indicated that they plan to have a permanent CEO by the end of the year.

Tips to save on your Electricity bill

1. Use less hot water
2. Turn geyser temperature down to 60° Celsius
3. Insulate the geyser
4. Install a solar water heater or Install a heat pump
5. Switch off equipment when not in use
6. Insulate the ceiling/roof
7. Reduce excessive heating or cooling
8. Install an efficient shower head
9. Install efficient lighting
10. Cook with Gas

South Africa is not the only country to have a problem with load shedding. Much of the developed world suffer the same fate. Naturally many third world nations have uneven electricity supply. Some of the countries which experience regular load-shedding Include United States, Canada, Japan, Italy, India and Pakistan. One of the most sever instances of load-shedding is in California, this was known as the Western U.S. Energy Crisis of 2000.This caused an 800% increase in wholesale prices.

There are many reasons that lead to the disruption in power supply in South Africa. Much of the rationale centres around poor planning. An understatement of demand by the apartheid government and a compounding of the problem with poor planning by the new government. The large demand by both house-holds and business is evidence of a buoyant economy and that our demands out weigh the supply of electricity.

In a twisted and cynical way we are the victims of this electricity crisis, however it also represents our success as a nation. We progressed beyond every expectation including the estimates that our own government had for our demands.

Written by Advocate Lavan Gopaul, Head of MANCOSA Business Nexus Unit


Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and opinions of MANCOSA.