‘Eskom of the future is already dead in the morgue’ – energy experts

Energy expert Ted Blom, who serves on the Presidential Task Team on Eskom, says the Eskom of the future is already “dead in the morgue”.

Blom was speaking along with fellow energy expert and task team member, Dr Grove Steyn at a panel discussion at African Utility Week on Tuesday.

The overview of the panel discussion was contained in a statement issued by African Utility Week and Powergen Africa. The event comes to a close today.

‘Dead in the morgue’ 

“Eskom’s governance has collapsed. We don’t know who is running Eskom because it certainly does not look like it is the board. All it can be is a third force,” said Blom. “We simply do not know who is held responsible because it is not maintained properly and not run properly. So, in terms of Eskom of the future – it’s already dead in the morgue. All we are throwing money at is for more people to be corrupt.”

Eskom’s overwhelming debt was a “fallacy”, he said, adding that he had called for a forensic investigation.

“They want you (taxpayers) to pay this debt but 75% of that debt is not due and that is why I have called for a forensic investigation.”

Blom went on to say that more than three quarters of the money Eskom needed was due to corruption and mismanagement and highlighted the cost of the Medupi power plant which had ballooned over the years.

“A year ago, I went back to Eskom to verify that amount and today Medupi is running at R170 billion for a half-finished project. If that is not corruption and mismanagement, then I don’t know what is and I don’t understand why we have to pay for that.”

Eskom’s Debt Trap

Steyn meanwhile spoke about Eskom’s “debt trap”.

“Eskom is indeed in a debt trap. It is now being bailed out by government almost on a monthly basis and even the R3 billion allocated in the budget is not going to be enough to fill the gap and get Eskom out of the debt trap. So, it is quite serious, and it means we will have to start thinking outside the box and find a range of solutions to help ensure – given Eskom’s systemic role in the economy – we do not end up in a situation where we have a full on default on debt.”

He also questioned Eskom’s role in the future.

“[The] Eskom of large-scale coal-fired power stations is not the future anymore,” he said, adding that the cheapest power does not necessarily come from large coal-faced power plants but from smaller scale renewables.

“If Eskom is not going to be the only party generating power (in the future), what will Eskom look like? That is an important question we do not have an answer for.”

‘Drastic Changes’

For Eskom to move into renewable energy, it will require “drastic changes”.

“The parts of Eskom that runs the grid and the distribution business, will of course continue to exist and will be very important for our future,” said Steyn.

Blom meanwhile also hit out at the delays with the Integrated Resource Plan, calling it a “disgusting disaster”.

Energy Minister Jeff Radebe said during his address at the same event on Tuesday that the release of the updated IRP was “imminent”.

“Cabinet approval of the IRP will define a tangible plan for energy security that also enables the participation of Independent Power Producers (IPP) side by side with Eskom and municipalities. I am on record as having indicated that Eskom alone cannot meet our power capacity requirements, because we estimate that the capacity extension under the IRP will cost in excess of R1 trillion in the period up to 2030, including the new power plants plus the requisite transmission and distribution infrastructure,” Radebe said at the time.

Blom said, however, that SA’s future relies on the IRP and what was needed was certainty and transparency.