Energize Inbox, August 2014

August 11th, 2014, Published in Articles: Energize

 

This month’s letters include a response to recent articles regarding electrification in South Africa; a reader’s view regarding the frequency of power failures; and a response to a recent lead editorial comment. Send your letters to: energize@ee.co.za

Our winning letter:

re: Electrification in South Africa

Sir
As an interested observer of the development of electricity supply in southern Africa for many years (cf. Feast or Famine and Light in Darkest Africa, 1998), I was interested to see recently published articles by your organisation on the question of electrification in South Africa. I refer in particular to “A Quarter Century of Electrification 1988 – 2013” by L Jac Messerschmidt (Energize, March and April 2014) and “Toward universal energy access: Designing a new household electrification strategy for SA” by Pepukaye Bardouille (Energize, July 2014).

These two papers, one looking back and the other ahead, present interesting but disparate perspectives on one of the most complex challenges facing electricity supply in southern Africa, on a par with  the present supply-side crises in capacity, the backlog in distribution system maintenance and the restructuring of the electricity supply industry.

Messerschmidt, a long-retired Eskom executive director and author, inter alia, of the text of “A Symphony of Power: The Eskom Story” (2000), makes much of the contributions by the monopolist utility towards the electrification programme in South Africa since the late 1980s. It is clear that he considers the Eskom effort (and in particular that of Ian McRae, the CEO at the time, although he is never mentioned by name) to be paramount to the success of the undertaking, in spite of the major contributions made by many others. He supports his views with numerous facts and figures, but the herd is sometimes lost amid all the cattle.

He doles out criticisms left, right and centre but is vague on the way forward. To achieve universal access, he maintains, would require doubling of the present levels of funding and other resources. This, he says, is a major challenge for those driving and leading the programme, for it will need the same, if not more determination, dedication and iron will today than it did twenty-five years ago, but it “would surely be welcomed by the millions who can still only dream of having electricity in their homes”. Clearly, Messerschmidt is firmly rooted in the history of which he was part.

Bardouille, on the other hand, is an International Finance Corporation (IFC) strategist seconded to the DoE to help design a new strategy to achieve universal electricity access in South Africa by 2025. She examines the situation with a view to establishing a way forward and proposes a new strategy based on existing policies because, she contends, these are still largely valid. She also wishes to revise targets to take the growth of new households into account, focussing  on reaching more remote areas and advocating a fresh approach that builds on lessons from the past.

These lessons include getting ministerial buy-in and strong steering committee support, using robust data to analyse the issues and innovate ways of gathering it, bringing international experience to bear, defining a clear way forward and, if need be, simplify what needs to be done and, finally, provide the ‘boots on the ground’ and extensive hand-holding to kick-start delivery.

IFC Advisory began assisting South Africa in fast-tracking its connections using this eloquent framework, assisting INEP and its partners to design and implement a fundamentally new approach to electrification planning and delivery. Over a period of a year, IFC put in place a multidisciplinary team to ensure that change actually happened.

According to Bardouille’s Lesson 1, it was critical to secure high-level political support and broad-based stakeholder buy-in. Before commencing the project, therefore, the IFC ensured that the minister of energy was personally committed to and involved in key decisions that would shape the strategy. A steering committee, led by one of the minister’s top lieutenants and comprising no less than a dozen different government departments and stakeholder groups, was created, resulting in strong political buy-in for a new approach. In May 2013, the DoE presented the electrification strategy recommendations to Parliament and in June, the Cabinet signed off on all the recommendations. It looked as if the cattle were all safely in the kraal.

Unfortunately, there have been two new ministers of energy since then and a major cabinet reshuffle  and if anecdotal evidence is worth a sou, there has been no noticeable change in electrification activity since that time, despite the lauded success of the approach. It seems as if someone forgot to secure the gate of the kraal and keep a tally of the old cows that got away.

That brings to mind Lesson 2: the use of “robust data” to analyse the issues. I have not been privy to the issues that Bardouille’s analyses of the data have brought to light, but if her work is based on the notion that electrification kicked off in 1994 when a mere 3-million out of 10-million households were electrified, and that “today” (presumably meaning 2012), 76% of all households were electrified, and further that 5,5-million households were connected to the grid, one should perhaps wonder if Bardouille’s analysis might have produced different answers if she had used numbers which were not at variance with those reported by StatsSA and other reputable institutions.

For instance, StatsSA reports that 36% of all households were already electrified by 1991 (49% by 1996 – no figures are available from StatsSA for 1992 – 1995) and by 2012, some 85% of all households were connected. That means 10-million out of almost 12-million households reportedly had access to electricity by 2012. Of course Bardouille, perhaps not familiar with the published information, might have used other sources.  After all, from a distance one herd of cattle may look much like another, although close up some might turn out to be donkeys.

Similarly, for instance, and without detracting from her analysis, Bardouille concludes that while many municipalities complain that money is the problem, unspent funds of more than R300-million could translate into 60 000 extra connections.  She aims to slash connection costs by more than half by improving technical skills in rural municipalities and improving their procurement, local coordination and basic project management skills, presumably all at no extra consulting costs.

The third and fourth lessons that Bardouille would have us learn, are to bring international experience to bear and develop a clear way forward. Apart from reservations about consultants, these are eminently sound suggestions, save for differences in environment and other factors. After all, grazing sheep in the Karoo is not exactly the same as trying to raise cattle in Nkandla.

It is with Lesson 5 that we learn the greatest lesson of all, for here Bardouille teaches us that we could do worse than to enlist the IFC to bring in its boots and hold our hands. True, this might bring in external perspectives, perhaps a fresh approach and an objectivity in dealing with complex stakeholder views, but we should perhaps first ask whether IFC has demonstrated a real understanding of the problems and an ability to implement anything that has made a real difference.

If the answer is not unambiguous, perhaps we might, after all, be better off heeding Messerschmidt’s dusty old history lesson and break all the rules in the book like McRae did to push electrification along. Perhaps only then might we get somewhere before the realities overwhelm all good intentions and the cattle die of thirst because we are still squabbling about how deep a perfect well ought to be and what lessons we ought to have learnt.

Jabu Mmetli

Energize Eskom Book insert-a symphony of power

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re: Crisis? What crisis?

Sir

Mr Roos’ article, “Crisis? What crisis?” (Energize, April 2014) contains points which are well made and brilliantly written. I just want to add my two cents. It was not my cake in the oven, but my dog grooming parlour that suffered during the cuts. We were not able to dry our customers’ pets. When service is interrupted it has a detrimental effect on businesses which are dependent on electricity.

In the case of our dog grooming parlour, people come from near and far to collect their pets, and there you stand, egg on your face, wet dog and very unhappy customers. No amount of apologies make up for that because since power is not out on their block, they don’t believe you, thinking it’s your own equipment. This has happened to us time and time again.

Now, coming back to what can be done about it. Do what countries do during war times? They pull the nation together to support the crisis. People would be happy to allow total blackouts across the board for an hour at a time, as their contribution, but one wonders what the results of the nation’s one hourly sacrifice would be?

Will the fat cats in office get even bigger bonuses? During the 1970s, when Britain faced a crisis, Prime Minister Thatcher froze all wage and price increases across the board. It worked. South Africans are price increased to death! I say that instead of Eskom lecturing the nation on how to tighten its belt to conserve electricity, the utility should start with cut backs like not selling our electricity to neighbouring countries and cutting executive bonuses until performance warrants them.

Good heavens man, in other industries if one does not perform you’re out the door! Why not with Eskom? Let’s get some directors with substance who can do the job and show results. Or bring in the Chinese to set SA up with electrical generators in competition to Eskom. I’m sure they can afford it and would welcome the opportunity. Lack of competition in a product essential to life and which a nation cannot do without, plus BEE and affirmative action (reverse apartheid), is the root cause of Eskom’s problems. I don’t ever recall electricity problems under the previous government, so why now?

Sue Marshal

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re: Owning our energy future

Sir

With reference to the article written by Dr. Steve Lennon (Energize, July 2014), I agree that keeping all these balls in the air at the same time is a remarkable achievement and I heartily congratulate Eskom on it. In addition to all that Eskom also had to labour under the ministrations of their one lonely shareholder, whose dictates got them into this trouble in the first place and keep on dipping their oar in regarding the choice of generation mode, who to buy their coal from, etc.

But to claim just 14 hours of blackout in six years is stretching credulity a bit far. What about all that money being spent on paying major industries not to consume electricity? Isn’t that load shedding under a different guise? And at what cost have the savings been realised? How many existing and potential investors turned tail and ran when they realised that we could not assure their power supply? And how many more have gone out of business or baulked at expanding or investing more because the price of electricity is now rivalling that of our labour and eroding our competitiveness?

The trade unions were also not shy to take advantage of Eskom’s naked state to demand and get astronomical wages. An unwillingness to close the lid on delinquent contractors has cost us even more money. How many jobs have been lost as a result of all these things? Hidden collateral damage includes the road network of Mpumalanga, which has been smashed by countless heavily laden coal trucks cross-crossing backwards and forwards to service Mom and Pop operations at inflated prices, again at the behest of Eskom’s one and only shareholder. No doubt this will bequeath succeeding generations with poorly rehabilitated holes in the ground sloshing with AMD. Eskom is not paying for all this largesse, but nevertheless we, the taxpayers, have to foot the bill.

Some may think it is unfair to paint Eskom with the same brush as their shareholder, but in truth they are inextricably bound together in the same club. Ownership is everything and the public has every right to view them as one. So yes, Eskom’s management has done a lot with the bad hand that they were dealt, but we are still in the red zone and will be for a while yet. And even after the immediate power supply hurdle is cleared, the economic and social cost of the calamity will drag at our heels for decades to come. Sadly many will face unemployment and grinding poverty for the rest of their lives.

Chris Herold

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