As Eskom celebrates its centenary, two energy experts offer conflicting views on the collapsing state-owned entity.
Eskom, formerly known as Escom before it was renamed in 1987, began to dominate the country in 1923 when the Electricity Supply Commission was established.
In 2001 in Financial Times named Eskom the best electricity company in the world. However, in 2017, it was said to be the biggest threat to South Africa’s economy as it struggled to provide stable electricity to its citizens.
Is Eskom going down?
Talk to The Wargaenergy expert Ted Blom said “Eskom is no longer Escom”.
“On the current basis with political interference, Eskom will not be the same organization at the end of the year. And in fact, not because of all the bailouts and all the noise.
“This 100-month-old organization is not the organization founded in 1923 by Dr. Hendrik Johannes van der Bijl. It is suckling, totally dependent on the tit of the Treasury and it is no longer paddling its own boat. It is paddling a political boat.
“It is paddling the boat of the new world order with the green energy agenda, which is the agenda of corruption. This is an agenda that is dirtier than fossil fuels that will be expensive,” said Blom.
Eskom is not dead
However, another energy expert Chris Yelland told The Warga there is a future for Eskom.
“The analysis goes too far, and to suggest that Eskom is in control of the new world order and the corrupt green agenda is in my view unfounded.”
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Move with the times
However, Yelland said Eskom has not moved with the times. He added that electricity utilities are still structured to meet South Africa’s needs from decades ago.
“Eskom has turned 100 and congratulations to them. But it is not a good sign that Eskom was established a hundred years ago as a vertically integrated monopoly to serve the needs of the time has not moved with the times and is still structured in the same way.
“This is not a structure that is fit for purpose in the modern world and I expect that we will enter a year of uncertainty. We have already seen the departure of the head of the transmission office, [and] two heads of generation, André de Ruyter and COO of Eskom Jan Oberholzer,” said Yelland.
CEO of Eskom
Eskom, whose CEO is appointed by the utility’s board in consultation with the government, has had 14 leaders since 2007.
The board last week appointed Calib Cassim as Interim Group CEO with immediate effect following the resignation of André de Ruyter.
Yelland said Cassim was a competent manager.
“But he is in a holding pattern and I understand his contract ends in November this year. So it is conceivable that he will leave Eskom at the end of this year. Eskom is looking for a new CEO and it is unlikely to happen before April 1, so there is uncertainty about the leader will continue.
restructuring of Eskom
Yelland said the functions that Eskom does will not “disappear”.
“Even Eskom has been restructured, because it looks like it’s happening and it has to happen because we need utilities that are well prepared for the future. We don’t need to go back to the past, in fact it’s not appropriate to go back to the past because the world has changed so much.
“The friends of Eskom, Telkom, ArcelorMittal, Sasol have basically changed, but Eskom has not changed. So, Eskom needs to change to prepare itself to be the utility of the future and any suggestion that we should go back to the past, restore Eskom to its former glory is wishful thinking and nonsense,” said Yelland.
The future of Eskom
Yelland said he expected Eskom’s restructuring to continue.
“We will see the creation of an independent transmission network company that will be carved out of Eskom and provide an independent and non-discriminatory platform for grid access with thousands of other generators.”
“This does not mean that the former Eskom generators will disappear, they may change shape, and we have heard from the finance minister that the government wants to concession the activities of the current Eskom power stations to operators that are more skilled in operating these assets than Eskom,” said Yelland.
The election
Yelland said the situation at Eskom could change at the next election in 2024.
“There is policy uncertainty and this is part of the problem. If people in government do not speak with a common voice, a common mind or do not have a common goal and pull in different directions, sometimes nothing happens.
“So, there may be a reversal of mind now, but my view is that Eskom needs to continue down the path of restructuring and prepare itself for the future,” Yelland said.
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