SA Electricity Supply Uncertain For Five Years 4
The electricity supply crisis will not be getting better for at least another five years, with our reserve generating capacity being less than half of what it should be. Eskom plans to spend R97 billion rand over the next five years to bring our reserves up to the benchamrk 15% reserve capacity.
The cause of this complete balls up can be laid squarely at the feet of government, specifically the cabinet, who barred Eskom from building any new power plants from 2001 – 2004 although one must wonder why Eskom didn’t start furiously building power plants after 2004. Cabinet barred Eskom from building new plants in the hope of attracting private investors, but they didn’t do much else besides that. So much for the efficiency of central planning.
The electricity landscape is quite uncertain with some municipalities (such as Cape Town) buying power via Regional Electricity Distributors (who are always being threatened with closure) and others buying direct from Eskom or other third parties. With the enormous capital outlay required to build power stations you can understand why private investors didn’t swoop in.
Unfortunately this is not the only area where government has made a decree and then sat back to watch nothing else happen. After Telkom lost their “official” fixed line monopoly (which still exits for all intents and purposes) it took five years before anyone was prepared to invest in a competitor and they only did so with significant government investment as well (Neotel is 30% state owned).
I wonder which industry will be next to suffer the stellar planning of cabinet.