Four years ago the Eskom board shortlisted three candidates to become CEO of the power utility after the sudden resignation of Phakamani Hadebe in May 2019.
The candidates included Andy Calitz, a former Eskom electrical engineer who had left South Africa and worked for Shell in senior executive roles on every continent. In a “sliding doors” moment on November 15 they chose Andre de Ruyter.
In the 1998 romantic comedy Sliding Doors, Gwyneth Paltrow gets fired from her job in London and rushes towards the closing doors of a train. The movie replays two versions of her life.
In the first, she boards the train and gets home to find her boyfriend cheating on her. She kicks him out, re-invents her life, and becomes a success.
In the second, she misses the train, and the boyfriend’s affair continues. Her life goes on a downward spiral as she changes dead-end jobs to support him.
Lest we forget, many people condemned De Ruyter’s appointment. Paris Mashego, a former National Union of Mineworkers energy co-ordinator, said: “His credentials are questionable. He has destroyed Nampak and as such he will not receive our support.”
Bloomberg said De Ruyter had pocketed bonuses of R21.5m as Nampak CEO, while the company’s value had dropped by 82%.
I asked some Eskom board members why they had appointed De Ruyter, who was by far the weaker candidate. They said Calitz was abrasive and arrogant.
Four years later, I can only wonder what could have happened if the board had appointed Calitz. Would South Africa have followed the first version of Paltrow’s life — a re-invention of Eskom — and avoided its worst year of power blackouts in 2022?
As the bourgeois media rewrites history and portrays De Ruyter as a victim of imagined political intrigue that has got nothing to do with Eskom’s shocking operational performance, South Africans must understand the scale of the economic calamity that has happened under his leadership.
According to statistics provided by an Eskom engineer for the 11 months until December 5 2022 and a recent Council for Scientific and Industrial Research (CSIR) report, the utility shed 12,200 gigawatt hours (GWh) of energy during the five years since 2018 when Cyril Ramaphosa became president. This was equivalent to 84.8% of all the energy shed since 2007.
By comparison, Eskom shed 1,352 GWh from 2009 to 2017 when Jacob Zuma was president, equivalent to 11% of the energy shed since 2007. There were no power blackouts during seven of the “nine wasted years” under Zuma. He kept the lights on.
Since 2018, the blackouts have cost the economy R1.1-trillion based on a gazetted cost of unserved energy of R87.75c per kilowatt hour. The power blackouts cost the economy R16.8bn (0.3% of GDP) in 2018, R118.6bn (2.1% of GDP) in 2019, R157.8bn (2.8% of GDP) in 2020, R212.2bn (3.4% of GDP) in 2021 and R556.1bn (8.5% of GDP) in 2022.
The economy cannot afford another day, week, or month of blackouts
Eskom has shed 10,656 GWh since January 2020 when De Ruyter was appointed. This was equivalent to 74.1% of the energy shed since 2007. From January to December 5 2022, Eskom shed 6,337 GWh, equivalent to 44.1% of energy shed since 2007.
There was more energy shed this year than in the four previous years combined. This year there has been a 260% increase in blackouts compared with 2021. Their cost under De Ruyter has been R935bn.
Over the past three years, De Ruyter has wrecked Eskom’s power plants. On December 7 Eskom announced stage 6 blackouts. It said 24,036 megawatts (MW) were down due to breakdowns of 19,052MW and planned maintenance of 4,984MW. This time there were no excuses. Eskom did not blame workers or sabotage.
It was just incompetence. People who love a conspiracy theory and blame sabotage to deflect attention from the incompetence should understand the scale of the breakdowns.
On that day more than 50% of Eskom’s nominal capacity was down. That was about the same as Ukraine’s power system after more than two months of bombing by Russia. There are no terrorist groups or employees or suppliers that have the capacity to regularly shut down up to half of South Africa’s energy capacity. Energy analyst Ted Blom said the plant breakdowns of 19,052MW were the highest he had seen in his 34 years of involvement with Eskom.
Eskom annual reports give us an understanding of what is happening at the utility. The blackouts at the old power stations have very little to do with what occurred during Zuma’s reign. There were no plant breakdowns before 2018. They are a recent phenomenon.
According to Eskom’s propaganda, its power plants were in poor condition and had been run too hard before De Ruyter was appointed. There had been no maintenance, and the plants are now too old to be fixed. But Eskom had a healthy energy availability factor (EAF) of 78% in 2018.
Over the past few weeks, the EAF has collapsed to about 50%. That is unacceptable. In 2018, Eskom had an energy utilisation factor — a measure of how hard the plants are run — of 71.6%.
This was below the maximum ideal threshold of 80%, according to an analysis by the National Society of Black Engineers. Eskom had an average planned maintenance ratio of 11.8% between 2016 and 2018, far above the target of 10%.
Under De Ruyter maintenance has increased but most plants break down a month after being fixed, according to a spreadsheet provided by another Eskom engineer.
Eskom power stations have an average age of 32 years if one excludes Kusile and Medupi. According to Jacob Maroga, the former Eskom CEO, power plants can work for 60 to 70 years. “At Eskom, there is no correlation between age and plant performance.”
The economy cannot afford another day, week, or month of blackouts. It needs a short-term solution to the power crisis. Renewable energy will not address the immediate crisis. After a decade, the R200bn renewable energy independent power producers (IPPs) programme could only deliver 1,658MW on December 15. The short-term solution is to fix Eskom power plants.
People who say Eskom cannot fix its plants should remember that it had an EAF of 72% as recently as June 2020. The Eskom board must make the right appointment to replace De Ruyter. It cannot repeat the same mistake.
After fixing the power plants, South Africa must act like a proper country and have a permanent line item in the national budget to finance the addition of the new capacity.
In 1998, the government decided Eskom should not add new capacity because it wanted to invite IPPs. They did not materialise. It has now gone back to the failed 1998 playbook.
It has pinned its hopes on IPPs and an improbable surge in private sector investment to finance 100% of new capacity with no investment from the fiscus. That is absurd. The government cannot repeat the same mistake.
• Gqubule is an economist and writer
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