Eskom is in a situation almost impossible to solve
In a classic Catch-22 scenario, the power utility needs all of its consumers to pay for its product, but at the same time to use as little of it as possible.
Image: iStock.
To become a fire-breathing entity again instead of the cold, dead, slag found at the bottom of a flooded boiler, Eskom needs money. Lots of it.
However, Eskom could be the literal definition of being in a Catch-22 situation.
It needs all of its consumers to pay for its product, but at the same time to use as little of it as possible. Because consumers are not using as much as Eskom needs, Eskom needs to raise the cost of electricity – hence its court fight with the National Energy Regulator of SA (Nersa).
Is this more good money after a bad idea? Time will tell.
In the meantime, crippling R450 billion debt which has to be serviced or it will collapse the economy if there’s an investor run means there is only small change to keep plants running at the ragged edge because the diesel generators consume prodigious amounts of fuel.
If Eskom wins its battle with Nersa, and the cost of electricity increases, consumers will use even less in the weak economy as they scrimp on what is now becoming a grudge purchase – which puts Eskom back where it started.
Intermingled with all of this are the unions which will fight Eskom every step of the way at any attempt at restructuring, an economy which is on life support at 0.6% growth, Eskom’s flagship Medupi which will never produce the 6GW it was designed to produce thanks to bad design and poor construction, water scarcity for boilers and dams for power generation, and the economy.
Even a small attempt at growing the economy would put unbearable strain on Eskom leading to more blackouts at higher levels for longer periods of time as it plays catch-up on repairs to its geriatric power stations.
The solution of course is independent power producers, vociferously opposed by coal trucker companies and unions alike.
President Cyril Ramaphosa’s announcement of sabotage casts a shadow over the politics of energy, and it’s his last excuse.
Something has to give.
Amanda Watson.
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