A vast number of jobs are potentially on the chopping block in South Africa: engineering professionals, senior project managers, energy storage specialists, coal truck drivers, technicians, asset managers, operations officers, and others. They are seriously threatened if the state-owned power utility, Eskom, restructures its operations.
Presently it powers 95 percent of South Africa, but it is not looking good. It is struggling to weather historical maladministration, a failed nuclear deal with Russia, crippling debt and a change of presidents. Electricity distribution is once again under the microscope.
The situation is looking particularly dire as the country moves into their winter months. Three managers at the company were recently suspended, deemed responsible for coal shortages, and the utility is also without a CEO at the moment.
Up for debate?
To ensure an ongoing electricity supply in the country an open public debate was held in Johannesburg earlier this month. It was tasked with asking the pertinent question: ‘Should Eskom be restructured and if so how and when?’
Frans Baleni, the Deputy Chairman of the Development Bank of Southern Africa and former Secretary-General at the National Union of Mineworkers (NUM) argued that the utility has served South Africa well; he believes it is impossible to turn back from the network footprint it has.
He says that Eskom has a solid fleet of generation plants, but concedes that they are now aging and need to be upgraded.
He warns that a complete restructuring of the utility would put 40,000 jobs at stake. He proposes that the utility deals with governance issues, focuses on building investor confidence and deals with corruption decisively, so that business performance can be prioritized.
Miss Nelisiwe Magubane was also one of the speakers at the debate. She is a Non-Executive Director of Eskom and Former Director-General at the Department of Energy. She is an electrical engineer with 25 years of experience. She is a key player in energy policy in the energy sector. She has also been named as one of the top 50 most influential people in the energy sector in South Africa.
She commented that those countries with a more privatized energy sector had superior systems, when compared to the vertically integrated state-owned utility business model. However, she thinks the terms and conditions surrounding the privatization of the energy sector in South Africa should depend on whether a private system would lead to the lessening of inequality and poverty.
“What kind of industry structure is going to meet our objectives? You need skills, you need drive, you need financial astuteness. We need to have a proper governance of the energy sector. It needs to be beneficial for all South Africans.”
Dr Grovè Steyn, a graduate from the University of Cape Town and the University of Sussex, was the last speaker at the event.
Steyn started his career as an Industrial Engineer at Eskom. He went on to become a leading infrastructure and regulatory economist in South Africa. He is currently the Managing Director at Meridian Economics. He says undoing the 95 year institutional model of Eskom is going to be a tough process, but it has to be done. He explained:
“This institutional model has long since outlived its usefulness. It has now become critical for South Africa to embrace the technological disruption and address the environmental imperatives in the power sector.”
Steyn says Eskom’s ‘abuse of dominance’ in South Africa has led to ‘managerial moral hazards’. Citing numerous studies, Steyn highlighted the ‘human cost’ of coal power stations - explaining that coal power reportedly kills 2,000 people in South Africa per year.
Steyn advocates for clean, renewable energy sources. He notes that the reduction of costs in technologies such as solar and energy storage means governments have little choice but to use the cleaner alternatives in new energy project builds.
He also wants the energy sector to open the industry up to new players, to move away from the state-owned monopoly. More choice, more competition and a democratized energy industry can’t be a bad thing.
“It is now globally recognized that electricity generation is best organized as a competitive sector. And our own experiences with our IPP program supports this very strongly.”
Where are the jobs being created?
Power sector talks, which are now a national conversation, are pressing for the sector to be overhauled. South Africans need to ensure they are skilled-up to deal with the newer power generation technologies, and the jobs that are created through them.
Some of the traditional jobs will begin to dwindle; coal truck drivers are particularly concerned that they will be made redundant. Already Eskom has said it wants to shut down four coal power stations by 2020. In their stead the country is asking renewable energy providers to apply for tenders to create renewable plants in South Africa.
The renewable energy industry is responsible for the creation of a large number of jobs around the world. According to the International Renewable Energy Agency, there were 3.4 million renewable energy jobs available in the photovoltaic industry in 2017 alone. The entire energy industry accounted for 10 million jobs last year - with China supplying 43 percent of the industry.
A group providing renewable energy, Abengoa, has just completed the construction of a concentrated power plant in the Northern Cape. They believe South Africa’s best bet for a secure renewable energy supply is to go with blended energy plants: with both solar photovoltaic (PV) technology and concentrated solar power (CSP) technologies.
Bloomberg. “Renewable Energy Jobs Are Becoming More Available.” IOL Business Report, 11 May 2018, www.iol.co.za/business-report/energy/renewable-energy-jobs-are-becoming-more-available-14881893.
Creamer, Terence. “South Africa Urged to Consider CSP-PV Blend to Lower Cost of Dispatchable Solar Generation.” Engineering News, www.engineeringnews.co.za/article/south-africa-urged-to-consider-csp-pv-blend-to-lower-cost-of-dispatchable-solar-generation-2018-05-07.
Watson, Amanda. “Which Way for Eskom?” The Citizen, citizen.co.za/news/south-africa/1925176/which-way-for-eskom/.