Reconstruction

• Back then only 36% of all South Africans had electricity in their homes.
• The development programme promised to double that number by electrifying an additional 2.5 million homes by 2000.
• This seemed achievable – during the 1980s, the state-owned power utility Eskom’s build programme was so aggressive it had surplus electricity.
• By 1994, South Africa’s coal industry was generating high quality coal which was exported mainly to Europe.

What went wrong

• Eskom tried to convince the government to allow it to build more power stations.
• But under the macroeconomic policy, the government decided that new power stations must be built by Black empowered businesses.
• For that to work, the prices of electricity needed to increase to make it financially viable for the businesses.
• The White Paper was accurate in predicting when the country would run out of power.
• If the Eskom CEOs had signed the power purchase agreements, it would have brought online 5GW of renewables.

The current dilemma

• This provided for a very large increase in the number of renewables and the closure of several coal-fired power stations.
• But Mantashe later delayed the procurement of renewables, deepening the crisis at Eskom.
• Dividing the utility up was approved in 2019 but the National Transmission Company was only set up in 2024.
• Ramaphosa appointed an electricity minister, Kgosientsho Ramokgopa, and released the Energy Action Plan to end power cuts.

Solutions

• It dramatically increases the emphasis on gas – it is a gas infrastructure plan and South Africa doesn’t have much gas.
• The country will have to import gas and pay in US dollars, thus increasing its dependence on the dollar.
• Instead, South Africa needs to transition to renewable energy plus backup, which is batteries and a substantial gas reserve.

Mark Swilling is a Non-Executive Director of the Eskom National Transmission Company of South Africa. He writes in his academic capacity. He has received funding for his research from National Research Foundation, VW Foundation, Open Society Foundation and European Climate Fund.