SA on brink of total blackout: Eskom CEO

Eskom CEO Tshediso Matona on Monday told stakeholders that one unexpected event at any of its power stations could push the country to the total failure of the national electricity system that may take weeks to resolve.

Eskom previously said it might take two weeks to restart the electricity system, should a national black-out occur.

Matona also said load shedding could be expected from next week, according to Christo van der Rheede, CEO of the Afrikaanse Handelsinstituut, who attended the meeting.

In reaction, Professor Raymond Parsons from the North West University Business School said whether Eskom could keep the lights on in the period ahead would be critical for the country’s economic prospects in 2015.

“Business people need the assurance, not only that production will not be again seriously disrupted as industry and commerce reopen this month after the holidays, but also for investors who need to have certainty if they are to commit themselves to the SA economy in the long term,” Professor Parsons said.

The two-hour high level meeting on Monday afternoon was attended by about 100 representatives fom business, several consultancy firms and organised agriculture, said Henk van de Graaf, assistant executive manager of agricultural body TLU SA, who was in attendance. Apart from Matona, the meeting was also addressed by Eskom chair Zola Tsotsi and attended by members of the board and the whole Eskom executive.

The media was not invited.

Matona repeated his earlier statements that Eskom is not in a crisis, because the organisation is functional but in the next breath he said we were facing a national emergency, Van der Rheede commented. “How can you say the organisation is not in a crisis, but you cannot supply your product?” he asked.

“Basically it seems they are all on their knees every evening, praying that there is enough electricity,” Van der Rheede said.

Matona told the delegates that the diesel budget was depleted and Eskom was hoping for money from government “but they are not collecting [from] their municipal debtors,” said Van der Rheede.

He said it was the same government in charge of the non-paying municipalities and asked when this government was going to clamp down on them.

Van de Graaf said according to a calendar shown to delegates, power failures [are possible] from middle January, the whole of February, March and April.

“We are concerned, because [for] farmers who rely on irrigation for growing cash crops, especially vegetables … the whole cold chain is dependent on electricity and if it cannot be preserved, the consumer will be affected.”

Van de Graaf also questioned why farmers who do not pay their full Eskom account are being disconnected, but there are no consequences for municipalities that fail to pay. He said Eskom representatives could not give a clear answer.

“We told them, whatever the name of your customer, you have to collect [from] your debtors.”

Matona told the meeting that Eskom’s interim profit of R9.3 billion will be wiped out in the second half and a mere R500 million profit is being projected for FY2014/15.

“I got the impression Eskom was giving us the facts as they are, and that we appreciate,” Van de Graaf said.

Vusi Khumalo, president of the South African Chamber of Commerce and Industry (Sacci), who also attended the meeting, said Sacci will canvas ideas from its members to mitigate the risk of a total blackout and take it back to Eskom. Members will focus on alternative energy sources and plans to conserve energy, he said.

He added that while the picture is bleak, Eskom has plans to minimise the risks. He said Eskom made it clear that there is a high probability for load shedding from next week until the end of April. Khumalo said while it will still be damaging to businesses, Sacci hopes that load shedding can be limited to weekends.

“The sum total is that this problem is much bigger than Eskom. It is a country problem,” Khumalo said. He appealed to business formations to educate members on the current state of affairs and called on all South Africans to stand together to avert the risk of a total national blackout.

Parsons said the prolonged uncertainty around the energy outlook in SA is beginning to have a corrosive effect on investor confidence and the overall situation at the beginning of 2015 needs to be addressed at the highest level.

He called on the ‘war room’ on Eskom, created by the Cabinet last month to manage the Eskom emergency, to issue a statement on what remedial steps are being taken to rectify the short-term situation, to stabilise Eskom finances and to limit the damage which expectations of further power failures will do to business confidence.

“Already the SACCI Business Confidence Index for December 2014 released last week showed a sharp drop largely attributable to business concerns around the impact of power supply problems and load-shedding on the economy in the recent past,” Parsons said.

In its system bulletin sent out on Monday, Eskom forecast the following supply and demand for the week:

Eskom system bulletin from Monday, 12 January 2015

Republished with permission from MoneyWeb.

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