It’s all about Eskom, as Ramaphosa backs his finance minister on energy mix

That Eskom threaded through Thursday’s presidential question slot in the House shows how the power entity is on everyone’s mind – almost daily, occasionally up to Stage 6, rolling power cuts have persisted since early September. 

But it’s a fluke of timing. Questions to the president must be submitted at least 16 calendar days before the presidential Q&A. That means the original questions can be scripted, but not the follow-ups. And it’s here the president’s glass remained half full.

“We want Eskom to be financially stable… Eskom is going to remain the mainstay of our energy generation and transmission,” said Ramaphosa in response to United Democratic Movement (UDM) Chief Whip Nqabayomzi Kwankwa’s follow-up.

The process to unbundle the power utility into transmission, distribution and generation under an umbrella Eskom Holdings company continues. As it has since October 2019 when the “roadmap document” was released.

https://www.dailymaverick.co.za/article/2019-10-29-eskom-roadmap-floated-ideas-with-flexible-milestones-for-an-uncertain-future/

“The new [Eskom] board has the skills, the experience to do a thorough assessment of leadership at Eskom. They must be given the space to do so,” Ramaphosa replied to EFF leader Julius Malema’s follow-up on his question on CEO André de Ruyter’s job security.

At least twice in the three-hour uninterrupted question slot, the president mentioned Eskom’s ratings upgrade. Once in relation to Finance Minister Enoch Godongwana’s controversial gas and nuclear comments.

Speaking on Monday at the South African Chamber of Commerce and Industry, the finance minister talked inclusion of “old technologies” – “some gas”, “some nuclear” was how it was put – for a reliable electricity supply.  

Godongwana’s comments came just days after the Medium-Term Budget Policy Statement announced that government would take over between one to two-thirds of Eskom’s R400-billion debt, or between R126-billion and R266-billion.

Read more in Daily Maverick: "Silence on Eskom and other SOEs highlights politically difficult MTBPS – and other trade-offs"

The final number will emerge in the February 2023 Budget, four years after Godongwana’s predecessor, Tito Mboweni, delivered a bailout of R59-billion over two years, alongside an annual R23-billion for a decade.

Read more in Daily Maverick: "Mboweni’s The Eskom Job: The devil lives in the details"

On Thursday, Ramaphosa backed his finance minister, citing the Integrated Resources Plan (IRP) that, after several years’ delays since October 2019, features coal prominently, with a nod to nuclear and some renewables.

https://www.dailymaverick.co.za/article/2019-10-18-irp2019-coal-dominance-continues-with-nods-to-renewables-and-nuclear/

“There is no double-speak on this. We are committed to what is set out in our IRP… clear on the mixed energy trajectory for our country,” said Ramaphosa in response to DA leader John Steenhuisen’s follow-up question.

“If we accept that, we do not see any contradiction with what the minister said. And as he said it, it didn’t collapse the financial markets. In fact, people even re-rated Eskom…”

And with fortuitous timing, Thursday’s presidential comments were dovetailed by a finance ministry statement:

“Minister Godongwana’s point was that South Africa’s energy transition will not be an immediate and wholesale abandonment of the country’s existing electricity sources, but a phasing-out of fossil fuels that may also involve transitional measures to maintain current coal and nuclear plants, and also the use of transitional sources like gas.

“Government’s key planning instrument, the Integrated Resources Plan (IRP), envisions a combination of energy sources, including solar, wind, coal, gas and nuclear, to maintain the security of electricity supply at the most affordable cost to South Africans.”