Vice President David Mabuza says the privatization of Eskom is not the answer to the energy crisis facing the country, with South Africans now having to contend with Stage 4 offloading.
U statement on WednesdayEskom has announced that stage 4 of the load shedding will continue on Thursday and Friday, with the possibility of introducing the lower stages from Saturday.
The extension of load shedding in Stage 4 was the result of further failures of the generating units at Kendal and Majuba due to leaking pipes. It said it would continue with scheduled maintenance to address known risks at the Arnot, Kriel, Matimba, Matla and Camdem power stations.
Mabuza answered questions for oral reply in the National Assembly on Thursday, where one of the questions was on Eskom and the transformation of the power sector to achieve long-term energy security.
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“The government’s policy options and position have not reached a point where privatization is seen as the answer to provide better solutions to the current challenges facing Eskom,” Mabuza said.
“Our current choice is to make Eskom a more efficient and effective state-owned energy generation and transmission company with all the necessary capabilities to ensure security and stability of energy supply in the interests of both the economy and human development as a whole.”
Generation, transmission and distribution
Mabuza said it would be inaccurate to characterize the ongoing processes of organizational transformation at Eskom as privatization.
“Instead, the utility is currently in an advanced stage of a spin-off process that will transform the electric power sector to achieve our nation’s long-term energy security.”
The power company’s focus is on improving maintenance and repairs to ensure increased energy availability, and that has nothing to do with privatization or public ownership of the utility, Mabuza said.
The unbundling or legal separation of Eskom into three subsidiaries: Generation, Transmission and Distribution is intended to allow Eskom management to focus, improve efficiency, create greater transparency of performance and provide greater protection against corruption and rent-seeking, the Deputy President said.
“To realize the potential of an independent transmission system and market operator, the main purpose of unbundling is to separate electricity generation and transmission from each other. Given this information, the creation of a new transmission facility is the most important step in the Eskom demerger process.
“Eskom Holdings will have full ownership of the new transmission company when it is established. Its main responsibilities will include acting as an independent broker in the electricity market, encouraging capital investment in the industry, and promoting energy efficiency and cost sustainability.
Provision should be made for the transmission entity to have agreements for the supply of electricity directly with consumers, including Eskom Distribution, municipalities, the South African Power Pool and large electricity consumers.’
According to Mabuza, the utility is on track to separate generation and distribution by the end of 2022.
“What we must continue to focus on is returning Eskom to its optimum performance by ensuring that the organization has sound governance structures in place and that the required skill levels are in place at plant level.”
Compiled by Vhahangwele Nemakonde