Darkness and light – the electricity crisis in South Africa

I met Basker Vashee when I worked with TNI in the 1970s, and it is a great privilege to be honouring his memory here tonight. I want to dedicate this talk to Basker’s vision for a free Zimbabwe, which has been devastated by the latter day tyranny of the erstwhile forces of liberation. At this time of devastation, we need to renew the call for a Zimbabwe which is free of repression, fear and hunger.

Tonight I am going to talk about a policy failure in South Africa relating to the provision of electricity. I have therefore called this talk ‘Darkness and Light’. Although the focus is South Africa, there is a wider impact on the subregion of Southern Africa, since the electricity grids of neighbouring countries are interlinked, and there are demand and supply implications.

Earlier this year many South Africans gained a taste of what it would be like to live in a society in which electricity was not reliably available. This happened as the state electricity monopoly called Eskom began to shut off the supply at random to the communities that it serves. The impact was highly disruptive, and many urban South Africans began to have a sense of what it would be like to experience what was the norm for its poorest rural and urban citizens, whom, because of affordability and access issues, had never been linked to the grid.

The electricity outages led to a number of problems for educational institutions, hospitals, businesses and households, all heavily disrupted. Cities experienced gridlock as traffic lights failed, adding hours to the commuting time.

We were told that the grid contained insufficient power to meet our needs. But
What is interesting is that the consumption of electricity has never exceeded the potential supply. South Africa has a total of 39000 MW available, yet consumption on the coldest winter day has never exceeded 36 000 MW. So what went wrong?

Part of the problem was a failure of management of the system. Management extended the grid to reach new urban and rural users, it signed contracts with new mines and smelter plants – which are intensive users of electricity -- , without investing in new supply. For many years South Africa had an excess of supply, and so the utility rested on its laurels and failed to think through the question of phasing in new investments. However there was also a failure to invest in maintenance of the system, and in training of new operators. There was pressure to reach employment equity targets without making appropriate commitments to training. Some parts of the grid were being run by people with insufficient management or operational experience.

The 2008 outages were not a new phenomenon. In the summer of 2005-6, a series of events led to the shutdown of the Koeberg nuclear reactors outside Cape Town. The sudden subtraction of this power supply severely diminished what was available to users, who were the first to suffer from random outages. The full impact of these outages was calculated as a loss of R8bn/€750m estimated by the Cape Chamber of Commerce and Industry. The reasons for the closures of the reactors at Koeberg varied from gross mismanagement (a verdict of the National Energy Regulator) and the discovery of a broken bolt inside one of the reactors (which the Minister of Public Enterprises claimed was due to sabotage, although he subsequently denied this after receiving pressure from trade unions, even though the media kept replaying his original statement confirming his use of the sabotage accusation).

Eskom should have learnt from the Cape Town outages. It should have used this experience to put in place energy saving mechanisms to avoid the disruption of further random outages. Instead it did none of this, and did not extend the lessons of the Cape Town outages to the national level.

As a result the outages of early 2008 were nationwide, and went through three phases. Firstly, the outages were random and unpredictable, leading to numerous problems, like patients dying on operating tables. Under huge pressure, government convened meetings with the larger energy users, and demanded that they reduced their demand for energy by 20%. Many of the mining companies had to reduce their production drastically. The planned aluminium smelter at Coega – operated by Rio Tinto Alcan – was postponed indefinitely. This controversial project was one which had negotiated cheap electricity prices that are so low that they are still being kept secret. Since South Africa has no bauxite of its own, the chief reason for locating it inside the country was the offer of lengthy contracts for cheap electricity. The smelter would have consumed the same amount of electricity for one plant as the entire neighbouring city of Port Elizabeth. In general, the random outages had a chilling effect on the economy, and led to a fall off in foreign direct investment.

Eskom claimed that the blackouts were vital if the grid was to operate, since demand for electricity had outstripped supply. In theory there is enough electricity to go around, since Eskom has the capacity to generate more than the highest demand on the coldest day of winter. However, because of management inefficiencies and a series of logistical errors, the grid was not generating at its full capacity. Eskom blamed this in turn on factors like deliveries of coal being too wet to be burnt (after an unseasonably rainy summer), or insufficient deliveries of coal to the power stations.

The public outcry forced Eskom into a second phase of systematizing the outages. For a period, one could get information in newspapers and on the internet on precisely which areas would be dark at what times (in Johannesburg, for example, the outages were scheduled for four hours, three times every two weeks). While these were, for the most part, adhered to, some cuts lasted far longer than the advertised times. The cuts caused great disruption to the economy, to additional urban traffic congestion, and to people’s sense of confidence in government.

Popular responses to the outages were varied. Most efforts to overcome the load shedding involved a massive run on petrol generators, or the implementation of other household solutions at an individual level. There were few spontaneous attempts to resolve the problems at community level. However, even the individualized solutions mostly involved fossil fuels. Although the government said it would introduce subsidies for photovoltaic water heaters, these proved derisory in view of the continuing high costs of buying and installing the equipment.

After some weeks, Eskom announced a new phase and put an end to what it called the load shedding. It argued that demand had diminished sufficiently not to have to institute regular outages. However in March the utility made an application to the regulator for a price increase in 2009 of 53% for electricity. This came at the same time as surging inflation, which led to a wave of public protests.

The protests by COSATU unions in April 2008 drew attention to the fact that workers had reached the end of their tether on the question of higher oil, food and electricity prices. Inflation in these commodities has risen higher than ever, and the oil price rise has, amongst other things, led to higher prices for coal, uranium, and imported foods. Some of our imported foods include rice, and more frequently than before, grains like wheat and maize, when we cannot grow enough at home.

Eskom claimed it needed the 53% increase in order to cover the higher costs of procuring sufficient coal for power stations as well as to cover the more than R300 billion in capital costs it wants to spend on new power stations.

In the eyes of government, Eskom— whose mismanagement of the grid was arguably the largest contributor to the problem -- has been given the mandate to resolve the problems that it was inadequate to manage in the first place. This is like giving a jackal the right to police the chicken coop. In addition, Eskom’s top officials were likely to be rewarded with huge annual bonuses until a public outcry argued for a strenuous rethink. Yet we are still in a situation wherein the government looks to Eskom for solutions in which the public has no say.

One would have expected by now that there be some kind of commission of enquiry into Eskom’s mismanagement of the problem. In democratic societies, a crisis of this sort would at least have led to the resignations of the relevant ministers, in this case the minister of minerals and energy Bulelwa Sonjica (and also the former energy minister who is now the deputy president, Phumzile Mlambo-Ngcuka) and minister of public enterprises, Alec Erwin. However, our cabinet ministers, and other public officials responsible for the crisis, are all still in place. Nor have heads rolled from Eskom’s board whose chair is former environment and tourism minister Mohamed Valli Moosa.

Instead the political shelf life of these officials continues, and their narrative intensified. They appealed to business and workers to accept Eskom’s demand for higher rates now, under the guise that the medicine will be even more bitter in the future.

In turn, Eskom is trying to railroad the public and the regulator into accepting its huge need for more capital.

To what end is Eskom intending to devote such large public resources? Apart from its announced intention to build up its coal stocks, there are six main projects in which spending is planned:

Two new enormous coal-fired power stations generating a total of 9576 MW, the first at Medupi, Limpopo province, and the second called Project Bravo at Kendall near Witbank in Mpumalanga. Generation will only start after 2011, and the projects together have an estimated cost of R163 billion.

Plans for nuclear power generation estimated at generating 10 000 MW and costing over R100 billion. These include plans to commission a pilot pebble bed modular reactor (PBMR) generating 165 MW and 5 larger pressurised water reactors (PWRs) each generating around 1 000MW. If authorised, these are unlikely to come into operation until at the very earliest 2016.

Commissioning two open cycle gas turbines at Atlantis and Gouriqua in the Western Cape (these would operate to assist peak demand and consume large amounts of imported diesel fuel in their operations). Together these will cost R5 billion, and generate around 2050 MW.

Establishing a pump storage station at Ingula in the Drakensberg, costing R9 billion, and generating 1332 MW from 2012. This will entail pumping water up the escarpment and releasing it to turn turbines at periods of peak demand.

Re-commissioning mothballed coal-fired power stations at Camden, Grootvlei and Komati in Mpumalanga – a process which will gradually become fully operational by 2011, generating 3,800 MW at a cost of R2o billion.

Plans are also afoot for a solar thermal power station near Upington in the Northern Cape, which will generate 600 MW and cost at least R50 million.

Apart from the last one, the rest of the programme requires an intensification of South Africa’s reliance on fossil fuels. This comes at a time when our emissions are the 11th largest of all countries, and higher per capita than even those of the United States. As the international community begins to enter negotiations to revise the Kyoto Protocol, greater attention is likely to be paid to emissions in the developing countries numbered amongst the world’s largest emitters, like China, Brazil, India and South Africa. It is likely that the world will expect South Africa to reduce its greenhouse emissions, of which carbon dioxide is probably the most significant. Most of our emissions come from burning coal.

So instead of making a deeper contribution to relieving global warming, Eskom is expecting us to go down the road of greater carbon emissions. This contradicts some of the earnest declarations for international consumption made from time to time by environment minister Marthinus Van Schalkwyk.

While the nuclear industry claims that it is part of a solution to climate change, in effect it is only the reaction in the power station that does not emit carbon. When we think of all the other stages in producing nuclear-based electricity, there is a great deal of carbon intensity: mining, milling, transportation, reactor construction, conversion, enrichment, reprocessing, and disposal of waste all make a significant contribution to carbon emissions. We should not fall into the trap that nuclear is a better energy alternative than coal, because it also leaves an insoluble legacy of radioactive waste, the spectre of weapons proliferation, and the need for a repressive state attempting to control and safeguard nuclear materials and overly centralise power generation.

If this analysis seems far fetched, we only have to turn to the latest nuclear policy document which emanated from the department of minerals and energy in mid-2007, which calls for the establishment of all the stages in the nuclear chain mentioned above, as well as the creation of a nuclear police force to oversee this (see www.dme.gov.za for the text). Using apartheid-style consultation, the DME published the policy document in the Government Gazette, expecting a good response. Only 26 entities sent in comments, of which the large majority were members of the nuclear industry. Instead of promoting a real national debate on these matters, the DME official responsible announced in January 2008 that this was tantamount to getting a full mandate from South Africans to go ahead with the policy, since the majority of responses were positive.

It should be mentioned that the plans for nuclear expansion include the reacquisition of enrichment capability. The apartheid state developed this capability in order to enrich uranium for the six + nuclear weapons produced between 1979-1990. But aside from enrichment, the policy also claims that South Africa will build a reprocessing plant, in order to allow for the extraction of plutonium from the spent reactor fuel. Both these paths, enrichment and reprocessing, may lead South Africa back into a position where it can participate in weapons proliferation. Despite at the present time having fairly strong non-proliferation legislation, it is not clear that this will always be the case. By going down this road, South Africa stands to weaken support for making Africa a nuclear weapons-free zone.

Two weeks ago, the cabinet approved the nuclear policy. Yet no one has independently evaluated Eskom’s proposals. Are they the most appropriate way to go in the light of our development needs? Do they serve the commitments we are expected to make in terms of climate change? Or are they kneejerk responses to a crisis which is ill-understood by officials and politicians seeking a quick fix but ignoring South Africa’s long term needs?

The application for a rise of 53% in electricity bills for next year resulted in a Summit of business, government and labour, held under the auspices of NEDLAC – the National Economic Development and Labour Council -- which did not rule out Eskom’s long term needs, but decided on a policy of smoothing the price increases over a three-year period. The regulator bought into this proposal, and agreed on increases of 25% in 2009, 20% in 2010 and 25% again in 2011. In a sense the regulator has failed to place any conditionality on Eskom’s capital spending. Having broadly accepted the need to raise the cost of electricity to consumers, it has bought into the logic that our long term electrification should depend on expanded coal and uranium use. While this solution is one which is favoured by large industry in the short run, in the long run it ties our development to outdated and retrogressive energy options.

This is precisely the time when we need an informed public debate in which the orthodoxies can be evaluated, questioned and challenged. We should be an open enough society and a robust enough democracy to assess our options more effectively. We should be allowed to place the concerns of working people on the table, and not just pander to the short-term interests of capital. Before we are pushed along the path of unsustainable energy options, we should surely need to consider the alternatives. These are increasingly available, technologically feasible, and worthy of investment.

Yet Eskom seems only marginally interested in their adoption. As the rest of the world makes increasing investments in wind, solar and other alternatives, Eskom is using the current crisis to scare the public into acceptance of the fossil fuel and uranium route. Part of the reason for this is that the alternative energy sources are less centralised, and easier to place in local community hands. For this reason they require less monopoly control. They can generate far more jobs than the older forms of generation, opening the way for local people to gain livelihoods from their installation, maintenance and repair without the need for expensive training. They suit our development needs more exactly.

We should be heading forward to become a smarter society, not one which continues to be imprisoned in the outdated energy solutions of the fossil and uranium age. Are we up to the challenge?

If unions are to make the case for more affordable and more sustainable energy, they need to consider how we generate it. In the past some unions (including COSATU as a federation and the NUM) have questioned going down the uranium road, to the extent of passing congress resolutions advocating the contrary. Is it not time for labour to sponsor a national energy debate which looks into the new array of possibilities for energy production that the twenty-first century has opened up? Or is it sufficient to leave the policy making to the special interests like Eskom and the large industries which argue for more of the same recipe?

The new commitment period for the Kyoto Protocol is scheduled to begin in 2012. It is clear that the world is going to put pressure on some of the emerging economies, especially those like Brazil, India, China and South Africa which do not have Annex I targets but use huge amounts of coal, to accept a greater role in emissions reduction. Such countries have been hiding behind the doctrine of “common but differentiated responsibilities” enshrined in the Rio Declaration and the UN FCCC. However, the growing urgency of the problem, added to the impatience of the Annex I countries, may mean that countries like South Africa will have to accept a more stringent timetable for emissions reductions. One lesson from the crisis is that there is little preparation for resisting such pressures.

Other lessons are also palpable. We need a more prepared, informed civil society to take stronger responsibility to intervene in energy policy matters. We need a more collective approach to short-term solutions to energy outages, not the sheer individualism which we have witnessed recently. We need to underline the importance of a national energy policy debate that would take into account the concerns of the different stakeholders, and break the monopoly of access to government held by the mining and smelter companies and other large users of electricity. We need to prioritise the extension of the grid to all citizens. We need to recognise the potential for livelihoods of more decentralised and more renewable energy sources. We need to question the orthodoxy that only coal and uranium can deliver the requisite power needs of the country.

Our development needs, including the needs to create more jobs, reverse climate change, and avoid pollution, demand that we take the politics of energy more seriously and seek solutions that prepare us better for the future. Let us learn how to realise the full potential of renewable sources in order for our citizens and our neighbours to move towards prosperity and peace.

Thank you very much.

On xenophobia

Earlier this year a series of xenophobic attacks were initiated by the socially marginalized who saw little prospects of getting out of their poverty and participated in the construction of a moral panic in order to draw attention to their problems.

In past years there have been many popular protests by the marginalized, mostly at municipal level, aimed at denouncing corrupt or high-handed local officials and councilors who have badly neglected the socio-economic needs of their constituents.

The recent round of xenophobic actions were principally directed at foreigners, but attacks were also directed at members of smaller South African ethnic groups. The bulk of the perpetrators were shack or hostel dwellers who formed mobs that attacked and dispossessed tens of thousands of foreign nationals and others. They accused the foreign nationals as being responsible for high crime and for being given unfair privileges in housing entitlement.

Government did little to learn from the lessons of 2005, when in the Western Cape, mobs attacked a series of Somali shopkeepers, left unprotected. Nothing was done to reeducate the shack and hostel dwellers not to perpetuate xenophobic attacks. In the end it seemed that government was turning a blind eye to the attacks.

Illegal foreigners, if held by police, are sent to privately-operated detention centres, prior to being deported. Some of the most notorious of these centres, like Lindela in the Gauteng province, are way below standards. Lindela’s shareholding includes prominent members of the ANC Women’s League. Scandals involving abuse of detainees, and their subjection to semi-starvation before deportation, have been aired in the media.

Government’s only response to the outbreaks of violence was to declare that our neighbours had helped us tremendously during the exile of many anti-apartheid fighters had caused them to be based in other countries in the subregion. On the ground, many people found this difficult to relate to. Instead government should have stressed that people from the subregion has always been involved in building the South African economy, that many had married into South African families, and that many offered useful skills to the economy. Finally many, especially those fleeing from violence or repression in the Congo, Swaziland, Zimbabwe, Rwanda, etc. deserved a place in a country that was prepared to absorb their experience and skills. None of the lessons of the killings of Somalis has every been translated into materials that could build a broad anti-xenophobic approach.