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Ramaphosa on load shedding: If you don't pay, you're part of the problem

Oct 21 2019 08:40
Khulekani Magubane, Fin24

President Cyril Ramaphosa on Monday morning promised significant moves to address South Africa's energy woes, including the restructuring of Eskom into three entities.

But in his weekly newsletter, released on Monday morning, he also blamed non-payment for the utility's problems.

"Our citizens deserve to be able to conduct their lives, go to school and operate their businesses confident that they will not be plunged into darkness without warning. At the same time, as citizens, we must understand that when we do not pay, we are part of the problem.

"Eskom is owed huge amounts of money by individual users. This is the time for a frank discussion on the payment of owed money to Eskom by individual users. The culture of non-payment exists in several parts of the country. Boycotting payment for services had a place in apartheid South Africa. It was an effective tool to mobilise communities against an unjust system. But it has no place in present day South Africa. If public utilities like Eskom are to survive, then all users need to pay for the services they receive."

SA is 'frustrated and angry'

Ramaphosa said that load shedding "contributes to investor unease at a time when we are trying to attract more domestic and foreign capital to South Africa and to improve our global rankings on ease of doing business".

"It is also understandable that South Africans became frustrated and angry. This latest round of load-shedding makes even clearer the urgency with which we must act to protect our energy supply.

Last week, South Africa was hit by four days of load shedding after boiler leaks at six generating units and the breakdown of a conveyor belt transporting coal to Medupi power station. 

Eskom said that no load shedding was expected on Monday and that the probability of load shedding was low for the week.

Ramaphosa said that though there has been progress in implementing its nine-point plan, Eskom's financial position remains "untenable". Its debt burden is approaching R500bn.

A permanent Eskom CEO will soon be appointed, and will be tasked with turning the entity around in line with government's new "special paper" on Eskom, which will be released shortly, Ramaphosa said.

"The sheer scale of Eskom's debt is daunting. Further bailouts are putting pressure on an already constrained fiscus. As government has made clear, the most recent support to Eskom comes with stringent conditions. Fruitless and wasteful expenditure must be stopped," Ramaphosa said.

"The restructuring of Eskom into three entities – generation, transmission and distribution – is critical if we are to respond effectively to the evolving technologies and developments in the global energy industry. Eskom needs improve its credit rating so that it can raise funding for both his operational and capital expenditure." 

Ramaphosa warned that "tough decisions" will have to be made. "There will have to be trade-offs. All sectors of society, especially government, business and labour, must work together to bring this crisis to an end."

Energy plan

Ramaphosa also referred to government's long-awaited energy plan, the Integrated Resource Plan (IRP2019), which was released last week.

Ramaphosa said the IRP supported a diversified energy mix that includes coal, natural gas, renewable energy, battery storage and nuclear power and that the IRP envisaged a move towards "steadily reducing" emissions through a greater uptake of renewables.

"Because coal remains the dominant energy source for our country, we will be focusing on attracting investment in high efficiency low emissions coal technologies. South Africa has to reduce its carbon emissions in line with our commitments at the climate change conference held in Paris in 2015," said Ramaphosa.

"The IRP envisages a move towards steadily reducing emissions  through a greater uptake of renewables. Alongside this, we need to implement a ‘just transition’ to ensure that communities and workers whose livelihoods depend on the fossil fuel industries are not left behind.

"That is why we will be developing a clear framework for the process of decommissioning coal fired power stations that have reached the end of their operational cycle.The global energy transition will present challenges for communities and workers in the areas where fossil fuel powered energy generation takes place. However it also presents opportunities for those affected to have access to technologies that are more cost-effective and better for human health. It also presents significant investment opportunities in cleaner energies.

"For example, the recent natural gas find in the Outeniqua Basin off the Southern Cape Coast gives great hope for future discoveries of coastal gas, including recoverable shale. Opportunities also exist in the fields of biomass, biogas and cogeneration.

"While the IRP spells out our long-term plans, we must address our immediate and most pressing challenge to get the lights back on and keep them on. This means we need to get the utility back on sound financial and operational footing."

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