Eskom has spent millions of rand on properties in the Eastern Cape coastal town of Thyspunt, turning many landowners in the area into instant multimillionaires.
This is according to an investigation by the City Press, which uncovered that Eskom had been purchasing land at exorbitant prices for the development of a new nuclear power station in the area from 2012 until 2018.
The plan to build a nuclear power station in Thyspunt, which lies between Oyster Bay and Cape St Francis Bay, was scrapped in 2018.
By this point, however, enterprising property buyers – including companies with alleged ties to former Eskom employees – had flipped land in the area to Eskom for massive profits.
The City Press investigation found a number of deals which turned property owners into overnight multimillionaires, including one case where a farm was purchased for R87,000 and sold 12 years later for over R12 million, as well as a case where a portion of a farm was sold to Eskom for over R18 million despite being valued at R500,000 by the municipality.
Eskom told the City Press that these prices were based on market value and there was “nothing untoward” about the transactions.
Old nuclear plan
The Thyspunt nuclear power station formed part of the government’s now-defunct plan to build three new nuclear power stations in South Africa.
These power stations would collectively have delivered 9,600MW of power to the national grid, and their planned construction caused a significant amount of concern amongst activist groups and concerned residents.
Critics also pointed to the difficulties and gross inefficiency involved with the construction of the Medupi and Kusile coal power plants as a reason to scrap plans for new nuclear power stations.
It was estimated that if similar issues had plagued the proposed nuclear build, it would have cost Eskom R1 trillion and would have taken 20 years to complete.
This may have saddled Eskom with a significantly higher debt burden and further reduced its potential for financial recovery.
The new plan to save Eskom
In his State of the Nation address on 11 February 2021, President Cyril Ramaphosa outlined a number of priorities for the government’s national recovery plan.
These included steps to restore Eskom to operational and financial health and accelerate its restructuring process.
Ramaphosa said the Department of Mineral Resources and Energy will soon announce the successful bids for 2,000MW of emergency power to help curb load-shedding.
Independent power producers are also now able to sell electricity to local municipalities.
“The necessary regulations have been amended and the requirements clarified for municipalities to buy power from independent power producers,” Ramaphosa said.
In addition to these measures, the government will also soon procure an additional 11,800MW of power from renewable energy, natural gas, battery storage and coal, he said.
Regulation will also be amended to increase the licensing threshold for embedded generation to reduce strain on the national power grid.
“Recent analysis suggests that easing the licensing requirements for new embedded generation projects could unlock up to 5,000MW of additional capacity and help to ease the impact of load shedding,” Ramaphosa said.
“We will therefore amend Schedule 2 of the Electricity Regulation Act within the next three months to increase the licensing threshold for embedded generation.”