Mineral Resources and Energy Minister Gwede Mantashe has accused Eskom CEO André de Ruyter of failing to sign emergency power contracts that are available almost immediately and could help alleviate the country’s electricity shortage.
The attacks by Mantashe came while De Ruyter presented evidence of sabotage of the Eskom network, which he considered to be part of an attack against him and his management.
De Ruyter released photos on Wednesday night, showing how saboteurs tried to destroy Lethabo Power Station and plunge the country into stage 6 load shedding.
He has warned that this could lead to a total collapse of the power network.
De Ruyter on Friday said: Load shedding is to prevent a collapse, but there is a limit to how much generating capacity we can lose.
“It is clear that we are exposed, and that is why I think it is necessary for the country’s security agencies and law enforcement to step in and help protect installations of national importance. After all, these are national key points.”
De Ruyter is not only the target of saboteurs, he now finds himself in the middle of a political battle between two of the most powerful political figures in government – Mantashe and Public Enterprises Minister Pravin Gordhan, to whom De Ruyter reports.
Mantashe is trying to stop De Ruyter and Gordhan from committing the country to a radical phasing out of coal as an energy source.
Doing so would, among other things, transform the Witbank-Middelburg industrial complex of mining, steel and nickel processing into a region of ghost towns plagued by unemployment, but would help Eskom to escape its huge debt trap of R395 billion.
While Mantashe is fighting for the preservation of a significant amount of coal power, he denies allegations by De Ruyter that it is him and his department who are hampering the purchase of emergency power that could help keep the lights on.
According to Mantashe, 1 996 megawatts of additional generating capacity, for which the preferred bidders were announced in March, has long been available to Eskom, but the power utility is delaying taking it up. “They are playing for time,” Mantashe said in an interview with Rapport on Friday.
“They say they don’t want this or they don’t want that, but on June 3, the chairman of Eskom’s board wrote a letter to me in which he formally informed me that Eskom would not sign the agreement with these emergency electricity suppliers.”
Mineral resources director-general Advocate Thabo Mokoena yesterday released a list of correspondence between himself and the Eskom management from June, in which he tried to resolve the differences between the department and the utility.
According to the correspondence, all differences over the contracts had been eliminated by August 16, save for clarity on the way in which the prices of natural gas used for the generation of emergency power would be calculated.
In a letter dated November 11, Mokoena asked De Ruyter to have the power purchase agreements signed so that construction work for the projects could begin.
However, De Ruyter claims that no final electricity agreement had yet been submitted to Eskom and that he would be failing in his duty if he entered into an agreement whose financial implications had not been properly resolved.
By far the majority of the power – 1 220MW – will be delivered by the controversial Karpowership company, which is embroiled in a court case with a competing bidder, in which allegations of corruption are being made against Mantashe’s department.
Mantashe maintains that the bidding process was transparent, but said that he could not speak about the details of it outside court. The case is set to be heard on November 30.
The 11 projects were meant to start by August next year to supply 1 996MW of electricity between 5pm and 9pm, when the network is at its most vulnerable. But the political tug-of-war is likely to mean that the target will not be achieved.
Mantashe made it clear in recent weeks that he sees no point in the $8.3 billion (R130 billion) offered to South Africa by the governments of the UK, the US and France, as well as the EU, at the recently concluded COP26 summit as financing for renewable power projects in exchange for the closure of businesses that South Africa depends on for coal as a source of electricity.
“Talking about debt relief and financing is above my pay grade,” he said.
He therefore did not agree to meet a delegation from the US, the UK, France and the EU that visited South Africa last month to talk about financing mechanisms for the money that the countries want to advance to South Africa.
Instead, he is continuing with plans to build two new small 750MW coal-fired power stations in 2023 and 2027, despite environmental organisations going to court to try to stop him.
“I will go to court to defend it. These are experimental projects to test clean coal technology.”
Mantashe told City Press: We have a duty to utilise the country’s natural resources and try to find responsible ways to do so.
He is facing fierce criticism over his obstinacy.
City Press has learnt that he and Gordhan were spoken to by President Cyril Ramaphosa and asked to settle their differences. Meanwhile, a research report by Investec shows that Mantashe’s arguments are not without merit and that the money that the rich countries are offering is not nearly enough to finance the conversion to renewable energy.
According to the report, the approximately R130 billion will not be enough to upgrade Eskom’s power network so that the solar and wind power generators can be connected to the network when the coal-fired power plants are switched off.
It will eventually cost R188 billion to adapt and upgrade the network. The southern Cape is the most suitable region for generating wind power, but the power network is not able to supply it from there to the rest of the country.
Solar power will be generated mainly in the Northern Cape, but the power network in that region is also hopelessly insufficient to supply the rest of the country with electricity.
According to Investec, private power suppliers will not make investments in renewable infrastructure until Eskom or government has the approximately R188 billion in its hands to adapt its transmission and distribution networks.