Eskom CEO André de Ruyter first proposed unbundling the power utility into three separate entities and opening the market up to independent power producers (IPPs) three years ago, when he was initially interviewed for the top job.
But he was pipped at the post by Phakamani Hadebe, who was appointed CEO in May 2018 and resigned a year later citing health reasons and the challenges of the job. De Ruyter was then appointed in November last year and took up the position in January, weeks after SA plunged into unprecedented stage 6 load-shedding.
After years of inaction, mineral resources & energy minister Gwede Mantashe this week announced sweeping changes to power regulations as part of a plan to enable private entities to generate their own power.
The move - which brings De Ruyter's vision closer to reality - is seen as an important shift away from SA's reliance on coal.
De Ruyter, who said he had not been aware Mantashe would make the announcement, told the Sunday Times: "It [the unbundling plan] is entirely consistent with what the president said last year during his state of the nation address, and it's consistent with the road map for the electricity industry in South Africa that we intend to open up the generation market to ensure we get affordable electricity in a reliable manner."
He said he had long advanced private power generation, and this had been a facet of his proposal during his ultimately unsuccessful interview.
"Even before I was approached for a role at Eskom, I was an advocate for this, as it will lead to greater efficiency, better accountability and a reduction in aggregate risk," he said.
The beleaguered SOE - caught in a debt spiral that threatens to paralyse the country's economy - has been forced into regular load-shedding because it cannot meet demand for power. The blackouts shave between R1bn and R3bn off the economy daily.
Energy experts and IPP associations hailed Mantashe's announcement as a positive change in tack, one that will steer SA away from relying on coal-fired power stations in favour of green alternatives like solar power and wind.
It could mean a respite for consumers buckling under Eskom's ever-rising tariffs, with the utility in fresh court action to secure the right to claim as much as R190bn in price hikes from citizens.
With IPPs, business and homes filling the electricity void, Eskom can shift its focus to decommissioning near-obsolete coal-fired power stations and prioritising maintenance at newer projects like Medupi and Kusile, experts said.
Said De Ruyter: "We have a number of coal-fired units that are reaching end of life and as these are put into retirement, we will need to supplement generation capacity."
He quashed concerns that competition could see Eskom's energy priced out of contention.
"I think there is a very nice complementarity between bringing in new generation capacity and the phasing out of our older assets," he said.
The amount that Eskom, through court action, is trying to claim in tariff hikes for consumers
— R190bn
Energy analyst Mark Swilling said Mantashe's decision was probably not due only to mining sector pressure, but came about because of a forward view towards renewable energy.
"A number of coal-fired power stations, except Medupi and Kusile, will have to close in the next 20 years. That generation capacity will need to be replaced," he said.
"The reason for opening up the generation market is to make sure Eskom has a framework for investment to rebuild the generation fleet," said Swilling.
Another facet of Mantashe's bombshell address to mining barons was the concept of a state-owned rival to Eskom. While he was scant on detail, he said that a site for the parallel utility could be identified within a year.
Energy commentator Chris Yelland speculated that once IPPs were given the green light, thousands of megawatts of power could be added to the grid within a year.
The period in which South Africans will have to deal with load-shedding while Eskom prioritises maintenance
— 18 months
For many households, though, expensive solar solutions to go off the grid remain out of reach.
South African Institute of Tax Professionals CEO Keith Engel said solar for homes is not tax deductible and there are no incentives for homeowners to buy solar panels, which are exorbitantly expensive.
The shape of Mantashe's eased regulation framework remains unknown, with amendments to schedule 2 of the Electricity Regulation Act expected to be gazetted soon.
IPPs Association chair Thomas Garner said IPPs could have joined the grid years ago and had been sidelined because of policy.
"It's quite apparent that the state has painted itself into a corner by trying to protect its monopoly of power by over-regulating the industry. Now it can't supply power and needs to change direction," he said.
Eskom and the department of energy did not respond to detailed questions.
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