Sir
It is an incontrovertible fact that ever since that marvellous invention of that genius Faraday and that somewhat strange man Tesla, and that loud Yankee from Menlo Park, electricity has been harnessed for the greater good of man – and dare I say it, womanhood. Economies rise and fall not so much by the rise and fall of empires any longer, but by the price of electricity; nowhere more so than in a country that thrives on mines and heavy industry, smelters and furnaces. It is therefore all the more disturbing – disappointing? – in any case, outrageous, the way the price of electricity in your beloved country has escalated of late.
And this too, on a continent that holds such fabulous promise, such high hopes that some dub it the continent of the future. Investors are increasingly enthusiastic, nay, eager even to pour their money into African enterprises, especially those that are connected with energy. The Sahara is being touted as the future cradle of European solar energy. There is renewed interest in Grand Inga, whose generating resources put even those of Eskom to shame. Golden opportunities await us too, but it seems these are all too often being allowed to wither on the vine.
It is an incontrovertible fact that ever since that marvellous invention of that genius Faraday and that somewhat strange man Tesla, and that loud Yankee from Menlo Park, electricity has been harnessed for the greater good of man – and dare I say it, womanhood. Economies rise and fall not so much by the rise and fall of empires any longer, but by the price of electricity; nowhere more so than in a country that thrives on mines and heavy industry, smelters and furnaces. It is therefore all the more disturbing – disappointing? – in any case, outrageous, the way the price of electricity in your beloved country has escalated of late.
And this too, on a continent that holds such fabulous promise, such high hopes that some dub it the continent of the future. Investors are increasingly enthusiastic, nay, eager even to pour their money into African enterprises, especially those that are connected with energy. The Sahara is being touted as the future cradle of European solar energy. There is renewed interest in Grand Inga, whose generating resources put even those of Eskom to shame. Golden opportunities await us too, but it seems these are all too often being allowed to wither on the vine.
Meanwhile, the fallout of the global financial meltdown has put a millstone around everyone’s neck, nothing compared to my chain of woes. Over the next decade or so, you will need more than a mountain of cash, well over a trillion Rand, to build enough capacity to develop an economy that will truly eradicate poverty and provide work for all who want it. But the means to raise such huge sums no longer exist. Demand exceeds supply by far as the economy splutters and tax revenues fall. Already this year, the shortage will reach a hundred billion (mercifully, American billion) Rand. And that, Sir, will mean inflation will soar, and so will interest rates – and electricity prices even more. The millstone will grow ever bigger and heavier.
But didn’t Eskom receive a handsome tariff increase so it could fund some of its capital expenditure? Not a cent of it, because it has all been frittered away on coal and bonuses. And it’s no good going cap in hand to the shareholder, for that shareholder is the self-same government that is already struggling to meet its obligations. So what’s to be done? Everybody knows Eskom is already more than a little out of its depth, so one shouldn’t put too much hope in that direction. It seems like a true Gordian knot, a riddle that not even the Sphinx can solve. But despair not – there is one very simple and elegant solution known to those in the know.
And what they know, Sir, is that the key to the electricity industry lies in the transmission system, small, but as important as the nervous system. Control the grid and you control the industry, the economy, the country and even the continent. The national grid is already smart by nature of this simple fact, and so would those be who used it for fixing the industry and solving the funding crisis all at once. It is time to separate transmission from the rest. Allow it to do its job as system controller and broker between buyer and seller. Since it would remain under control of the government, it would become a policy instrument to help develop the economy instead of hobbling it.
With central control and direction firmly established, there would no longer be a concern about bringing in the right partners to help generation. Creating half a dozen empowered clusters would really shake it up. Let the best nuclear operators partner Koeberg and a nascent nuclear cluster; bring in world-class fossil fuel and hydro companies to help Eskom sharpen its efficiencies and truly compete on the world stage; let renewables become a serious part of the mix. The new partners will not only bring expertise and engender a culture of efficiency and competition, but they will want to grow and bring with them the funding from sources unattainable at present. As an additional spin-off, this plan will finally present an opportunity to solve the vexed question of the distribution industry, bringing about further efficiencies and importantly, improving service delivery and customer satisfaction. So we kill two birds with one stone: the funding crisis and the long-overdue rationalisation of the industry.
With a stable, healthy industry that is no longer only dependent on the limits of government’s ability to raise funds or strangle the economy with ruinous tariff increases, with global partners to bring expertise and funds, policy makers can once more turn their attention to the pressing need to alleviate poverty throughout the country, and even the world.
And that, Sir, I think is a vision worth serious consideration.
Meanwhile I remain your most obedient and humble servant.
Jacob Marley