The simple unbundling of South Africa’s power sector alluded to by the president could herald a new era in South Africa’s energy future.
to the 15th national congress of the South African Communist Party he said Eskom had been “operating according to a model that is no longer suited to the technology or the economic conditions of the present”.Eskom would emerge with optimised operations, restructured finances and a sustainable business modelis that supply shortages and a lack of investment in the sector during the 1980s led to the unbundling of the State Power Company in 2003.
Ramaphosa did not mention Australia’s experience of industry restructuring, but there are lessons to be learned there, too.unbundled its State Electricity Commission. Brown coal, gas and hydro power stations were established as legally separate state-owned companies. Transmission was formed as a proprietary company. System Operations was established as an independent not-for-profit company with shareholder oversight.
The road map anticipated the reform process to take place over several years. Eskom would emerge with optimised operations, restructured finances and a sustainable business model. It would have “appropriate controls to ensure that the recent incidences of irregular, fruitless and wasteful expenditure are a thing of the past”.Transmission was to be established as a subsidiary of Eskom Holdings by the end of 2021. Generation and Distribution would be established by 31 December 2022.
Certainly South Africa can source a similar level of domestic and international experts to avert the calamity feared by President Ramaphosa.But it doesn’t have to end in calamity. Some solace can be found in South Africa being a “last mover”.
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