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CR gambles on new electricity czar

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Picture: Phando Jikelo/African News Agency (ANA) – President Cyril Ramaphosa delivers the 2023 State of the Nation Address (SONA). Ramaphosa used the Sona mainly to reiterate what he told us last July, that he would “fix Eskom’s coal-fired power stations, accelerate private investment in generation capacity, accelerate procurement of new capacity from renewables, gas and battery storage, unleash businesses and households to invest in rooftop solar, (and) fundamentally transform the electricity sector to achieve long-term energy security, the writer says.

By Patrick Bond

If a state of disaster is really what is called for to solve the energy crisis, what are the kinds of actions a benevolent, pro-community, worker-oriented, non-sexist, environmentally responsible energy czar might take?

Unfortunately, the State of the Nation Address (Sona) didn’t provide any clues – and hence, society’s suspicion is that state regulations that protect people and the planet will be jettisoned, and there will be more patronage-based public-private plundering. President Cyril Ramaphosa used the Sona mainly to reiterate what he told us last July, that he would “fix Eskom’s coal-fired power stations, accelerate private investment in generation capacity, accelerate procurement of new capacity from renewables, gas and battery storage, unleash businesses and households to invest in rooftop solar, (and) fundamentally transform the electricity sector to achieve long-term energy security”.

Since he assumed the role of Eskom War Room chairperson more than eight years ago, we have heard some versions of these promises. Ramaphosa was an exceptionally strong community-labour-feminist environmental advocate when I met him a third of a century ago in the Rockey Street offices of Planact in Yeoville. That service organisation assisted branches of the South African National Civic Organisation (and their predecessors), including Ramaphosa, when he played a role in negotiating the electricity crisis.

He and his Soweto comrades insisted on bringing in Eskom to supply the township when it was clear that apartheid’s black local authority puppets were failing to provide a reasonable power supply. Through their rates boycotts and protests, Soweto activists eventually won a R10/month “flat rate” for all services. Women were particularly empowered since the feminist demand for electricity was based in part on ending the tyranny of internal household pollution, in which cooking, heating and lighting required coal, wood and/or paraffin (and with them, indoor particulates that spread TB) – so electricity was a godsend.

In the Covid-19 era, this is even more important, for Chinese scientists reported last year in Environmental Science and Technology that “Co-exposure of fine particulate matter and pathogens induced more serious functional damage and longer inflammatory reactions to the upper respiratory tract”. On Thursday night, the only thing Ramaphosa said about his former Soweto constituents – and indeed around two thirds of the national population now living in poverty – was that “2 million indigent households receive free basic water, free basic electricity and free solid waste removal”.

But the poverty line, properly set at R50/day, would actually encompass 12million out of the country’s 18million households. And in any case, the stingy free power supply is only 50kWh/ household/month, or roughly a quarter of what is needed in a low-income home with four residents. And can Eskom’s massive coal-fired power plants even be fixed? The two biggest were corrupted from the start.

Fateful decisions taken by former president Thabo Mbeki to authorise and raise foreign loans to finance the construction of Medupi and Kusile coal-fired power plants have raised the cost of electricity for ordinary people by more than 700 percent in after-inflation prices, given the vast time- and expense-overruns associated with the incompetent construction firm, Hitachi. The Tokyo firm’s gift to the ANC of 25 percent ownership of a local subsidiary plus a “success fee” (bribe) provided by the firm’s European boss, Klaus-Dieter Rennert, was unveiled in News24 reports last week.

They drew on previously secret US Securities and Exchange Commission documents, including ANC Chancellor House emails that showed, for example, how Valli Moosa – in 2007 both the Eskom chairperson and an ANC finance committee member (acting in a blatant conflict of interest) – was a special target of Hitachi due to his friendship with Chancellor House’s leadership.

In this context, it is tragic that Finance Minister Enoch Godongwana’s February 22 Budget Speech will force taxpayers to take the burden of repaying an estimated R200 billion of Eskom’s debt. Those loans should be instead questioned on grounds of internationally recognised “odious debt” liabilities. The foundational Hitachi-ANC relationship was well known even before construction got under way and full financing was arranged.

What if there really were a benevolent dictator in Union Buildings? Then a State of Disaster could surely spell relief if it allowed a rational state to:

1) Supply at least 2 kWh/person/day of universal free basic electricity, without an administratively clumsy “means test” – and to pay for it, more cross-subsidisation so hedonistic users pay more per unit of power above that lifeline base.

2) Penalise excess (often wasteful) energy demand, end Eskom’s crony apartheid-era Special Pricing Agreement deals supplying the world’s biggest mining and smelting companies with cutprice electricity (since they are responsible for net economic resource drain from South Africa), stop Sasol’s high-energy squeezing of coal and gas to make liquid petroleum at Secunda – still the world’s #1 site of CO2 emissions – because fuel import is much more efficient, and audit all other use by the Energy Intensive Users Group in the event deeper power rationing is needed, since that powerful network’s 27 member firms consume 40 percent of Eskom power but produce less than 20 percent of national economic output and fewer than 5 percent of jobs.

3) Halt Eskom’s punitive “load reduction”, which is a (mainly racist) strategy of apartheid-style “collective punishment”.

4) Ensure that any new system arising from Eskom’s further breakdown does not amplify energy apartheid, so that “feed-in tariffs” (where rich households’ surplus from solar is paid for by Eskom) do not reward privatised generation but instead promote electricity access for all.

5) Halt all new fossil fuel exploration, including fracking and offshore gas and oil, and immediately recall more than 1000 SANDF troops who are fighting in Mozambique on behalf of massive European, US and Chinese oil firms that extract so-called “blood methane” in Cabo Delgado.

6) Avoid the West’s imminent climate sanctions on South African exports by rejecting ongoing coal and new forms of fossil fuel (such as Karpowership’s or Eskom’s proposed methane-gas generation), and also halt highly damaging coal exports.

7) Prepare to pay South Africa’s “climate debt” obligations to victims of catastrophes like the 2019 cyclones Idai and Kenneth in Mozambique, the Durban “Rain Bombs” of April-May 2022 and the ongoing droughts and Day Zero threats here and across Africa.

8) And renegotiate a genuinely Just Energy Transition Partnership to avoid piling Eskom up with the R150bn in new (hard-currency) debt expected from the same lenders who financed the corrupt Medupi and Kusile contracts: the World Bank and financing agencies from the US, Britain, Germany, France and the EU. Of course, given how far the ANC has fallen into fossil-addicted corruption, achieving these objectives – as proposed by more advanced civil society groups for nearly a quarter century – will probably require the kind of “Arab Spring” so feared by Mbeki, to rid the system of corrupted politicos serving fossil fuel interests, often spouting pro-poor rhetoric but offering absolutely nothing but energy misery to the masses.

Patrick Bond – Distinguished Professor of Sociology at the University of Johannesburg and author or editor of several books on political ecology and political economy