'Bizarre' unbundling of Eskom will lead to grid collapse, claims expert

'Bizarre' unbundling of Eskom will lead to grid collapse, claims expert

Energy expert Tshepo Kgadima believes the Electricity Amendment Regulation Bill could lead to a collapse of the electricity grid.


On Thursday, the National Assembly passed the bill, which is meant to pave the way for the unbundling of Eskom.


At the same time, the National Energy Regulator of South Africa (Nersa) also consented to the transfer of Eskom’s powers and duties to the National Transmission Company South Africa (NTCSA).


While the bill has been praised by sections of the private sector, concerns have been raised by some political parties and unions on the impact it could have on consumers and the economy.


Kgadima said Nersa did not consider all available options before making a decision to hand over Eskom’s powers.


“The decision by Nersa is demonstrable of the dearth of skill, knowledge and expertise within Nersa itself about the intricacies of the electricity market of a country such as that of South Africa.


“They are making a transfer to a company which will now be saddled with a legacy contract, particularly with the so-called renewable independent power producers. This new company will have to purchase power which is 100% useless but at a cost of no less than R2.30c per kilowatt hour, which is way above six and half times Eskom’s generation inherent primary cost of production.


“This decision is only going to exacerbate an already dire financial situation of Eskom Group Holdings; it also spells a death knell for the National Transmission Company South Africa. So, it won’t even get out of the starting block.”


Kgadima says the unbundling of Eskom will lead to the collapse of the grid.


“The grid which it controls is going to be more unstable and there will not be sufficient power to keep that grid. So, if anything, it is going to precipitate the total collapse of the grid, purely because of the decisions that have been made by people who know nothing. The decision is bizarre and absurd in the extreme. Eskom should have been left as an integrated electricity utility.


“Now, you have enlarged a bureaucracy, increased the dysfunctionality, exacerbated the conditions of insolvency for Eskom and ensured that energy poverty is here to stay, therefore condemning the economy of this country to a state of arrested development.”


Listen to more local news below Jacaranda
Jacaranda FM

Show's Stories