Can Eskom Perform the Power Pivot?

Eskom's failure has forced President Ramaphosa to lift the cap on private electricity generation to 100MW. While corruption, rent-seeking and outright looting has contributed to its dysfunction, Eskom's decline is fundamentally one of policy failure.
Published 22 June 2021

President Cyril Ramaphosa has announced that the cap on private electricity generation is to be lifted to 100MW, opening up the grid to private generation.

“This will remove a significant obstacle to investment in embedded generation projects. It will enable companies to build their own energy facilities to cater to their own needs,” Ramaphosa said, adding that the Department of Minerals and Energy had been given 60 days to implement the change — a lightning fast schedule when compared to the usual snail's pace adopted by government.

This sea-change in policy, which effectively places the onus for new energy generation in private hands, was brought about by the systemic failure of Eskom's old generation units, leading to ever-increasing numbers of 'load-shedding' days and placing a cap on economic growth.

There are still many possible slips between cup and lip. The recalcitrant Minerals and Energy Minister, Gwede Mantashe, must still lead the process. Private generators must still obtain a 'grid permit' to supply their surplus to Eskom. The price for this surplus will still be set by a monopoly, and so on.

The reality is that this policy shift announced in 2021 was first agreed on under President Thabo Mbeki in 1998, but was not implemented due to political opposition and the erosion of implementation capacity in the state and in Eskom.

While corruption and rent-seeking, which escalated to all-out looting under President Jacob Zuma, has contributed to Eskom's woes, the story of Eskom's decline is fundamentally one of policy failure and, where the right policies have been agreed on, a failure to implement them.

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