Energy minister Gwede Mantashe is in talks with President Cyril Ramaphosa about a “second Eskom’’ housed in his department and generating electricity alongside the struggling utility.
While experts are urging SA to embrace a renewables future, Mantashe is a defender of the coal industry and its unions. On Saturday he told the Sunday Times that in the rush to renewables, SA still needed “baseload” — an apparent reference to burning coal.
While state-owned Eskom moves towards restructuring and a degree of private sector involvement, Mantashe insists a second state-owned company is needed.
He said he already ran several successful companies and suggested the move to renewables was more “’ideological than technical’’. Were it not for this ideology, SA would already be enjoying the advantages of Karpowership’s floating power plants that he proposed but which were rejected by cabinet, he said.
Ramaphosa shocked the nation on Friday when he told the SACP conference that he thought a second state-owned electricity generation company was a “great idea”.
Mantashe provided further details, telling the media that such a company would be solely focused on generating electricity, which would result in more power stations being built. The transmission and distribution of the electricity would lie elsewhere.
“So what we are suggesting — it’s not a decision yet — is let’s have a second generation company of the state and that generation company must focus on baseload and there must be a build programme for power stations,” Mantashe said.
“We can’t allow power stations to only hear decommission, we must also have a build programme and we think that if Eskom has no capacity, let’s start a second generation company.”
The move comes as the country has been under constant load-shedding for more than a month, reaching stage 6 in the past two weeks.
The decision to have the new company focused only on generation would be in line with the move by the government to unbundle the power utility into three parts — generation, transmission and distribution.
“It will be a generation company because transmission will be an independent company which does wheeling and a marketplace for energy. It is at the centre, it can source energy from anywhere including the private sector, it can source it and wheel it,” Mantashe said.
“So if there’s a power station that is developing alongside Eskom it means that you have capacity that is independent of generation but you allow the transmission to be a state company.”
I would have to question what the motives are behind that because why would they then create two centres of power, if you will
— Lungile Mashele
Once approved, Mantashe said, this power generation company would be established in his department.
He said he was “excited” that the idea was finding resonance as it meant he could start the initial processes.
“All that excites me is that the president begins to talk to me. It means he is warming to the idea and that to me is a call for me to act with speed,” he said.
“It’s an idea that we have been throwing around for the past two years but it’s the first time I get it catching fire.”
Energy economist Lungile Mashele said she found it perplexing that the government wanted to create a new entity instead of using Eskom to achieve new generation capacity.
“If you’re going to create another entity which also gets its mandate from DPE [department of public enterprise] and DMRE [department of mineral resources & energy], why can they not give this mandate to the current Eskom?
“If there is no change in who it’s going to be reporting to then I’m trying to really understand how this entity is going to be different.”
On the new company being established in Mantashe’s office, Mashele said: “I would have to question what the motives are behind that because why would they then create two centres of power, if you will. What is it that they are trying to achieve there that they can’t achieve with the current Eskom? Is it because Mantashe can’t get rid of the current CEO? Is it because he’s having difficulties on the political front so he’s coming up with a new entity now?”
Mantashe said Eskom has 17,000MW lying idle, which the power utility had to work on bringing back to the grid.
“In Eskom we have 17,000MW that are idle, they are not decommissioned, they are not working because they are not serviced and they are not maintained. First intervention for me is to maintain and service those megawatts, bring them to the grid and make Eskom work optimally.
“Second is the emergency procurement. For example, we got too excited and kicked Karpowership out and I still don’t have an explanation for that, but the reality is that Karpowership works in a number of countries — Brazil, Ghana, Senegal, Cote D’Ivoire — so what is it that they can’t work with us? They can work with us. If we didn’t throw toys we would be getting energy from Karpowership now.”
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