During the Afriforesight Future of Coals and Bulk Commodities Conference, Eskom board member Nelisiwe Magubane made a very odd and somewhat surprising admission in front of an audience listening in on the thoughts of various leaders on the future of energy in our country. At this sit in, she made the remark that economic growth, would put South Africa on “the brink of load-shedding”.
She does go on to explain why a positive economic outlook would have a negative impact on Eskom and it’s operations. It may seem like a very outlandish or absurd comment, but the explanation makes logical sense if you think it through. The main logical reason for this is that, the better the economy performs, the greater the demand becomes for energy.
This becomes an issue especially because energy availability in South Africa is about 11% below what it should be, currently sitting at 69%, a figure that should be sitting around 80%. This sentiment was echoed by Independent Energy thought leader CEO Mike Rossouw, who said the problems at Eskom can be attributed to completely wrong pricing policy.
Sharing his thoughts on this, he goes on to say that in the past, the current policy could be seen as suitable due to a smaller scale and less investment in new plants. However, presently Eskom can not generate the revenue needed to support investment into the new plants it is building, neither to support the scale of it’s operations.
He lamented that the focus on fixing Eskom was on addressing the symptoms, rather than the root cause of pricing policy.