Category Archives: Eskom

Analysis: South Africa is stuck in a failing second industrial revolution – Let’s move beyond it

Daily Maverick, dirk de Vos, 24 May, 2017

Last week, another busy news week in South Africa, saw two significant events. The one was the announcement by General Motors (GM) that after 90 years, it was pulling out of South Africa. The other was the presentation by the new Minister of Energy of her department’s budget speech. Both events elicited strong debate. GM’s decision has been variously ascribed to South Africa’s poor governance and the country’s newly acquired “junk credit status”. The Minister of Energy’s speech confirmed a long-standing commitment to the development of the oil sector, renewed an effort to get a gas economy going and to get nuclear procurement back on track. Renewable energy procurement, the one outstanding success of her department, gets to be moved under the very poorly performing Central Energy Fund and the whole programme gets to be reviewed. Both events highlight the continual failure of South Africa’s industrial policy and a singular failure of even imagining anything better. By DIRK DE VOS.

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Eskom funding may be muffling dissenting voices on nuclear

EE Publishers, Micah Reddy, amaBhungane, 28 April, 2017

The lure of millions in Eskom funding appears to have muzzled two research institutions previously highly critical of the state-owned utility’s plans to procure a fleet of nuclear power stations.

In the case of the Council for Scientific and Industrial Research (CSIR) amaBhungane understands that the CSIR’s Energy Centre has been effectively gagged since a secrecy-shrouded meeting in March this year between acting Eskom CEO Matshela Koko and his counterpart at the CSIR, Dr. Thulani Dlamini.

In the other case, the Centre for Renewable and Sustainable Energy Studies (CRSES) at Stellenbosch University withdrew comments it had submitted for publication that were highly critical of Eskom’s nuclear plans.

In an email seen by amaBhungane, CRSES director Wikus van Niekerk said: “We receive significant funding from Eskom, some from a programme where Matshela is personally involved in, and I need to be careful how I react in public not to put this at risk.”

Eskom, the CSIR and CRSES have all denied that Eskom has in any way tried to rein in independent research or debate on nuclear or renewable energy options.

Case 1: CSIR Energy Centre

Several industry insiders, who asked not to be named, raised the alarm after the CSIR Energy Centre’s head, Dr. Tobias Bischof-Niemz, suddenly pulled out of an event on South Africa’s future energy supply in early April.

They told amaBhungane that a strong rumour had emerged that at Koko’s March meeting with the CSIR chief executive, Eskom had pledged a significant sum – R100-million was mentioned – for CSIR research on technology related to nuclear energy. AmaBhungane was unable to independently verify the claim.

While there is no evidence of any untoward quid-pro-quo, the same sources noted that the CSIR Energy Centre has withdrawn from other public engagements on renewable energy and South Africa’s future energy mix.

Adding to suspicions is the reluctance of both Eskom and the CSIR to disclose any detail of the meeting between Koko and Dr Dlamini.

Both institutions declined to answer questions about who attended the meeting, what was discussed and whether Koko offered the CSIR additional funding, as rumoured.

Eskom spokesperson Khulu Phasiwe told amaBhungane the two institutions have had a long-running partnership: “CSIR and Eskom continue to enjoy a strong relationship in spite of occasional, but understandable, disagreements. Interim Group Chief Executive, Mr. Matshela Koko, meets with our partners on a continuous basis and, by their nature, these meetings are confidential.”

Phasiwe said Eskom had R30,8-million worth of “multi-year collaborative projects” underway with CSIR and another R17,5-million worth were “actively under consideration”.

The CSIR insisted the organisation “did NOT receive any payments from Eskom in order to stop any research that we are conducting,” but ignored questions about Bischof-Niemz’s non-attendance at the April event where he was scheduled to give a presentation on renewable energy.

Up to now the CSIR Energy Centre has been vocal about its research on South Africa’s optimal energy mix, which suggested that the price of renewables had dropped to the point where government’s plan to procure 9,600 MW of nuclear power did not make financial sense.

By contrast, the CSIR’s recent formal response to the Department of Energy’s latest draft energy policy – the Integrated Resource Plan (IRP) – was quietly placed on the CSIR website in early April without publicity or further commentary.

Asked about this, CSIR spokesperson Tendani Tsedu said: “The organisation will not comment any further on the submission made to the DoE since the CSIR submission is already public information as indicated above. This will also allow the DoE to conclude its internal processes towards the finalisation of the IRP.”

Last year the CSIR Energy Centre began publishing the findings of its studies into South Africa’s future energy scenarios.

The groundbreaking research showed a strong preference for renewable energy and posed a major challenge to the case for nuclear, of which Eskom has been a strong proponent.

The results of the research were widely cited and the CSIR Energy Centre’s staff presented their findings at conferences, seminars and business and technical briefings. They also did not shy away from voicing critical opinions on energy matters in the media.

But sources close to the CSIR Energy Centre told amaBhungane that the Centre’s staff appear to have been muzzled and are now avoiding public engagements on their renewables and IRP-related research.

According to Dudley Baylis, energy director of Bridge Capital – one of the organisations involved in the April event where Bischof-Niemz was due to speak – the CSIR Energy Centre informed the organisers at the last minute that they were “unable to share their energy scenario work”.

Other sources say that the CSIR Energy Centre has recently had to cancel similar events and media interviews related to energy systems, and that Bischof-Niemz is subject to a virtual gagging order by CSIR’s management.

Approached for comment, Bischof-Niemz referred amaBhungane to the CSIR’s communications manager.

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Nersa may probe whether Eskom’s refusal to sign renewables PPAs contravened licence

Engineering NEws, 11 May, 2017

he electricity subcommittee of the National Energy Regulator of South Africa (Nersa) will recommend that the Energy Regulator institute a formal investigation into a complaint that Eskom was flouting the conditions of its licence by refusing to conclude power purchase agreements (PPAs) for 37 renewable-energyprojects procured by the Department of Energy.

Spokesperson Charles Hlebela said the next meeting of the Energy Regulator would take place on May 25, and confirmed that, at its meeting on May 3, Nersa’s electricity subcommittee had endorsed the probe, following a preliminary investigation. Should it proceed, the subcommittee wants Mbulelo Ncetezo, the regulator member responsible for electricity, to chair the probe.

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Brian Molefe returns as chief executive of Eskom

BusinessDay, 12 May, 2017

Board spokesman Khulani Qoma confirmed his return in an interview on Talk radio 702

Board spokesman Khulani Qoma confirmed his return in an interview on radio 702 www.702.co.za on Friday.

“Definitely‚ he is coming back on Monday‚” Qoma said.

Molefe has resigned as an MP in order to resume his former position.

His return was sparked by a dispute over a reported R30m pension payment that he was awarded after he announced in November that he was stepping down “in the interest of good corporate governance”.

The Sunday Times revealed that he was awarded the hefty “golden handshake” despite being at the power utility for only 18 months.

Public Enterprises Minister Lynne Brown said shortly afterwards that there was no justification for the payment.

(Ed. note: I wonder what Lynne Brown is up to? Trying to save the R30m, getting rid of Koko, looking for another way to get rid of Brian, but without the handshake – waiting for the State Capture report to implicate him so he can be fired?)

Qoma said the Sunday Times story had resulted in Brown instructing the board to review the payout and come up with a mutually acceptable agreement. “We could not agree … so a decision was made to rescind the initial decision by the board for a pension payout.”

That effectively nullified his resignation and he would return to work on Monday‚ he said.

Molefe resigned from Eskom after it was revealed in the State of Capture report by former public protector Thuli Madonsela that he had exchanged 58 calls with Atul Gupta.

The report also detailed how cellphone records had placed Molefe in Saxonwold‚ the Gupta residence in Johannesburg‚ several times around the time of the controversial Tegeta-Optimum coal mine deal signed with Eskom.

Eskom chairperson Ben Ngubane said he was “absolutely delighted” to have Molefe back.

Op-Ed: Eskom, a slow-moving train wreck

Daily Maverick, Dirk de Vos, 12 May, 2017

The South African government, it seems, loves policy-making space and resists anything that would constrain this space. It is therefore a pity that very little policy, good or bad, gets to be implemented. Part of the problem is the top-down approach to policy-making. It means that while we get a never-ending supply of policy documents, too little consideration is given to “the facts on the ground”

Not paying attention to practical implementation makes us vulnerable to poor ideas such as pursuing a nuclear build programme that keeps returning, zombie-like. A recent contribution by Rob Turrell using advice given to the Minister of Science and Technology by the respected National Advisory Council on Innovation (NACI) shows that practically speaking, South Africa simply does not remotely have the capacity to participate meaningfully in any nuclear programme.

As an investment company, Eskom is a slow-moving train wreck. A big part of the problem are the disastrous Medupi, Kusile and Ingula projects, its existing debt and the funds it is yet to borrow. Chris Yelland did a convincing calculation of the massive (up to now) cost over-runs and then the price at which Medupi and Kusile would have to supply electricity to the grid if they were stand-alone operations.

In short, the price that they could supply the grid when (if) they are completed is well above Eskom’s own selling price for electricity. Eskom disputes Yelland’s calculations but refuses to disclose the details of its own. It should be noted that Eskom cannot even provide the required information to the regulator to enable it to make a tariff determination. Bluntly, Eskom is borrowing to continue financing the construction of stranded assets. …

Here is the full, depressing article