Eskom turns 100: Will it die or survive?

As Eskom celebrates its centenary, two energy experts have given conflicting views on the crumbling state-owned entity.

Eskom, previously known as Escom before the name was changed in 1987, began powering the nation in 1923 when the Electricity Supply Commission was established.

In 2001 the Financial Times named Eskom the world’s best power company. However, in 2017 it was touted as the biggest threat to South Africa’s economy as it battles to provide citizens with stable electricity.

Eskom going downhill?

Speaking to The Citizen, energy expert Ted Blom said “Eskom is no longer Escom”.

“On the current basis with political interference, Eskom will not be the same organisation by the end of the year. And in fact, it hasn’t been because of all the bailouts and all the interference.

“This organisation that turns 100 this month is not the organisation that was founded in 1923 by Dr Hendrik Johannes van der Bijl. It’s suckling, its totally dependent on the tit from Treasury and it’s no longer paddling its own boat. It’s paddling the political boat.

“It’s paddling the boat of the new world order with a green energy agenda which is anyway a corrupt agenda. It’s a far dirtier agenda than fossils fuels will ever be which is going to cost us very dearly,” Blom said.

Eskom not dying

However, another energy expert Chris Yelland told The Citizen there is a future for the emabattled power utility.

“The analysis is far-fetched, and to suggest Eskom is under the control of a new world order and a corrupt green agenda in my view is nonsense.”

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Moving with the times

However, Yelland said the parastatal has not moved with the times. He added that the power utility is still structured to serve the needs of South Africa from decades ago.

“Eskom is turning 100 and congratulations to them. However its not a good sign that Eskom established a hundred years ago is 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.

“It is not structure in a way that is fit for purpose in the modern world and I foresee that we are firstly entering a year of great uncertainty. We’ve seen the departure of the head of the transmission office, [and] two heads of generation, André de Ruyter and the COO of Eskom Jan Oberholzer,” Yelland said.

Eskom CEOs

Eskom, whose CEOs are 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 after the resignation of André de Ruyter.

Yelland said he believes Cassim to be a competent manager.

“But he’s in a holding pattern and I understand his contract comes to an end November this year. So, its quite conceivable that he will be leaving Eskom toward the end of this year. Eskom is looking for a new CEO and its unlikely this will happen before 1 April, so the uncertainty around the leadership will continue.”

Eskom restructuring

Yelland said the functions that Eskom performs are not going to “disappear”.

“Even is Eskom is restructured, as it looks likes its happening and should happen because we need a utility that is well-prepared for the future. We do not need to go back to the past, in fact going back to the past is entirely inappropriate because the world has changed significantly.”

“Eskom’s peers, Telkom, ArcelorMittal, Sasol have fundamentally changed themselves, but Eskom hasn’t changed. So, Eskom has to change to prepare itself to become a utility of the future and any suggestions that we must go back to the past, restore Eskom to its former glory is just wishful thinking and plain nonsense,” Yelland said.

Future of Eskom

Yelland said he hopes Eskom’s restructuring will continue.

“We are likely to see the creation of an independent transmission grid company to be carved out of Eskom and to provide an independent and non-discriminatory platform for grid access by literally thousands of other generators.”

“That doesn’t mean to say the former Eskom generators will disappear, they might change in their form, and we’ve heard from the minister of finance that government is looking to concession out the activities of the current Eskom power stations to operators who are far more skilled at operating these assets than Eskom,” Yelland said.

Elections

Yelland said the situation at Eskom might change with the upcoming elections in 2024.

“There is huge policy uncertainty and that’s part of the problem. If people in government don’t speak with a common voice, common mind or haven’t got a common purpose and are pulling in different directions, sometimes very little happens.”

“So, it is possible there could be a reversal of current thinking, but my view is that Eskom should proceed on the path of restructuring and prepare itself for the future,” Yelland said.

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