Analysis

Simplified Analysis of IRP-2018, back-door Privatisation of ESKOM & Energy Supply

Nehawu's full memorandum of demands to the Minister of Energy Attached

The raging debate on which energy supply is best suited for our country – IPPs/Coal/Nuclear, has left many of us out of the loop. What is required is a public discussion with all the different stakeholders in one room to explain and thrash out what is best so that we, the citizens can be properly informed. And so Nehawu opted to give us their version (simplified) and their 8page document is attached.

Historical context.

Apartheid government in its wisdom saw it fit to establish State Owned Companies (SOCs) to create quality jobs and goods services for the minority. Fast forward to the end of apartheid, the democratically elected government co-opted apartheid beneficiaries and operatives as advisors. Now with newly found importance of being advisors, they advised the new government to sell SOCs.

Demise of SOCs,

With a broadened mandate to serve all citizens it was inevitable that resources will be divided among a large spectre of issues, and many SOEs’ budget allocations were cut in real terms. Thus:

  1. Budgets cuts,
  2. Uncompetitive Ever-green contracts,
  3. Mismanagement by politically connected Executives and boards,
  4. Lack of appreciation by new political elite of SOCs potential of transformational agenda, quality job creation and provision of goods and services.

All these have played into this trajectory of this “advisors” that SOCs must be sold. The “Advisors” want their SOCs back.

Two of the most strategic SOCs sold so far:

  1. SASOL, as a result of this sale, the country has no control of oil prices and is at the mercy of markets and currency fluctuations
  2. ISCOR, the country has to import poor quality steel from China.

IRP-update 2018

Envisages:

The decommissioning of coal plants, until coal contributes 30% of energy supplied by 2040 and less than 20% by 2050. The current contribution sits at 81%.

Decommissioning of Koeberg Nuclear Power Plant in 2045, capacity of 5%. The difference will be made up by:

  1. PV and Wind, which is in the hands foreigners with the inclusion of few politically connected BEE partners. While selling elect to Eskom at an average price of R2.65/kWh while Eskom is reselling at 0.87kWh. This can only mean the demise of Eskom as we know it, the only people making money out of this arrangement in the owners of these technologies. While getting tracts of land for these plants.
  2. Hydro, this will be imported from DRC.
  3. Gas, this will be imported from Mozambique.

This IRP in its current form will make Witbank a ghost town, privatise Eskom, put energy supply in private foreign hands and thereby making electricity out of reach for majority families like with petrol prices.

Conclusion

  1. If the “Advisors” feel that IPPs are important they must be given an opportunity to buy straight from them,
  2. Eskom must not be forced to carry these IPPs because it is a strain on its balance sheet,
  3. Government must learn from the blunders of the past in privatising SASOL and ISCOR,
  4. Government must fund Nuclear power plants that will be run and operated by Eskom,
  5. Government must fund a replacement Reactor at NECSA to enable continuous production of medical isotopes, fund Nuclear Fuel Cycle to enable production fuel for Nuclear plants,
  6. Government must research alternatives to decommission coal plants that will have negative socio Economic impact in Witbank,
  7. Government must fund SOCs so they can live up to its transformational agenda,
  8. Stop its dependency on advise from former apartheid beneficiaries and operatives who are hell-bent on buying back SOCs.

Supplied by the The National Education, Health and Allied Workers’ Union (NEHAWU) in the Energy Cluster

Full memorandum: No To The Destruction & Cessation of South Africa’s Strategic Nuclear Capabilities NEHAWU 30th OCTOBER 2018 MARCH MEMORANDUM FINAL

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