Ramaphosa’s load shedding populism – a cheap, short-term political move that will hurt South Africa

With the “no end to load shedding for the next two years” refrain now well etched on our collective brains, the politics around it keeps reaching new levels of intensity. Not only is President Cyril Ramaphosa under intense pressure to take action (possibly including a Cabinet reshuffle), but he himself has joined the chorus of demands for Eskom to suspend its tariff increase.

This request may be taking us into new territory, where a President, seeking a short-term gain, is willing to publicly change the outcome of a regulatory process despite the long-term repercussions. It is also a sign of how Ramaphosa and the ANC are now feeling the heat of the pressure that’s been created by the widespread and deep dissatisfaction with the ruling party’s performance. Ramaphosa could well risk the credibility of our entire system of governance or at least the shreds that are still there, just for the problem to go away temporarily.

On Sunday evening, Ramaphosa addressed delegates at the ANC’s Free State conference. There, he said that he had asked Eskom to suspend its plan to implement the power price increase: “I have personally said to Eskom, ‘Eskom, it will be an injury to our people if we implement the 18% now when we are going through load shedding. Put it in suspense for a while’.” 

https://www.dailymaverick.co.za/article/2023-01-23-power-crisis-ramaphosa-plans-to-switch-off-eskoms-tariff-hike/

It is not clear if there is any financial underpinning for his statement or a long-term strategy that justifies it.

What has, however, become clear is that one of the reasons load shedding has been so intense is that Eskom does not have the money to pay for diesel to run its open-cycle gas turbine stations. Together, these provide around 2,000MW, equivalent to roughly two stages of load shedding (a new measuring unit that is understood by every South African but no one else on Earth — Ed).

Eskom ensured that the entire world knew what exactly the problem was by going public with its decision, and its explanation for why it could not continue to use diesel. Up until this point, the National Treasury has not said whether it would agree to Eskom’s request for more money.

Meanwhile, in its tariff decision, energy regulator Nersa said one of the reasons it did not provide Eskom with the full amount it had asked for (a 32% increase) was because it was going to rely too much on diesel generation.

Generating electricity through diesel is much more expensive than using coal-fired power stations and Nersa would prefer Eskom to use more coal than it currently does to keep costs and tariffs down. As is well known, many coal-fired power plants are out of action because of planned maintenance or sabotage.

It is generally accepted that Eskom is under existential threat and needs cash, mountains of it. The utility has huge debts, it is losing money anyway and now the President himself is suggesting it should forgo a tariff increase that was already half of what it asked for. 

Populism of the basest kind

“We should not make the mistakes of the past. For many years, critical maintenance was deferred, and our power stations were run too hard in order to keep the lights on. As a country we are now paying the price for these miscalculations.”

An unforced error