Eskom Showed Symptoms Of Malaise Back In 1967

As SA lurches from blackout to blackout, renewed calls have come from the City of Cape Town to be able to buy electricity from sources other than Eskom to ensure security of supply.

On Wednesday, the deputy mayor of the city, Ian Neilson, called on energy minister Gwede Mantashe to “show leadership and put the wellbeing of SA and our economy first” by allowing municipalities to buy electricity from independent power producers.

Neilson also called on the minister to avoid the “protracted and costly” litigation that is likely to come from the city’s Pretoria high court application to be able to source 280MW of wind energy and 150MW of solar energy from independent power producers by 2020.

Cape Town first approached then energy minister Tina Joemat-Pettersson for permission to buy electricity from sources outside Eskom in 2015, but after two years of silence from her department, court action was initiated in 2017. The city served papers on the department of energy and the National Energy Regulator of SA (Nersa) designed to test the legality of the stranglehold Eskom enjoys on the sale of electricity in SA.

Earlier this year the issue moved beyond just security of supply to encompass wider issues of environmental sustainability. In late September the city was joined in its fight with the government by the Centre for Environmental Rights (CER), which was admitted as a friend of the court. Nicole Loser, an attorney at the CER, stated, “local government has a constitutional duty to provide clean and healthy electricity, which does not pollute our air, water, soil or damage our climate”.

Responding to this crisis, Mantashe stated last week that his department was introducing “immediate measures” to increase the energy supply. History shows, however, that the department of mineral resources & energy’s understanding of the word “immediate” is hazy at best.

History also shows us that this particular mess was predicted more than 50 years ago, way back in 1967. In that year, the United Municipal Executive, a body that represented the interests of municipalities at the time, wrote a letter to the then minister of economic affairs, JFW Haak, indicating that the executive was worried about Eskom.

The letter from the executive states: “It has become clear to local authorities that the trend is towards the eventual establishment of Eskom as the sole provider and supplier of electricity, and ultimately as a powerful monopoly.”

The letter expresses concerns from a number of municipalities that their plans for increasing their own generation (in particular the expansion of the Bloemfontein municipal power station) were being deliberately delayed “apparently because of Eskom’s interest in this field”. It continues, “it is submitted that local authorities should not be restricted in their efforts to build and extend their own electricity supply undertakings”.

The United Municipal Executive’s primary concerns will ring loud and clear in contemporary SA. It feared that if Eskom prevented municipalities from generating or buying their own electricity, prices would inevitably rise because there was, in the opinion of the executive, “no guarantee that Eskom could supply electricity more cheaply” than existing municipal sources. The executive was also deeply concerned that Eskom’s indulgence in megaprojects such as the Orange River Scheme, the Cahora Bassa hydroelectric scheme, and the projected atomic power station, would prevent it from being able to “supply electricity at a reasonably economic tariff compared with local authorities”.

This warning was a stark premonition of the catastrophic mess that Eskom has got itself into with the disastrous pursuit of Medupi and Kusile power stations, which are now both hundreds of billions of rand over budget — money that Eskom has been clawing back from South Africans via a decade of huge price hikes, and via the seemingly endless transfer of taxpayers’ money from the Treasury to Eskom.

In lamenting the lack of transparency in regard to the relationship between local authorities and Eskom and the generation of power, the United Municipal Executive stated in 1967, “the stage has now been reached where clarity is needed in the relationship between, and the rights of, those bodies”. Then, as now, clarity is desperately needed.

As we have now reached uncharted territory with stage 6 blackouts, it is clearly more urgent than ever that Mantashe takes “immediate” action to allow municipalities both to generate their own power through plants owned by municipalities in the interests of the public, and to buy energy from independent power producers.

Whether King Coal Mantashe will be interested in taking such steps, given that new energy generation will inevitably come from renewable sources, remains to be seen.

Overy is an environmental researcher at the University of Cape Town.