Loadshedding worse than stated, actually hit ‘Stage 8’ admits Mantashe

Energy Minister Gwede Mantashe has admitted ESKOM lied to South Africans about load-shedding stages it was implementing. In this interview Samantha Graham-Maré, the Democratic Alliance’s (DA’s) Shadow Minister of Electricity.notes: “…in a couple of questions in the last week, Gwede Mantashe has admitted that last year January we went into Stage Eight load shedding…it’s the first time that anybody from government has actually admitted to the fact we did go into Stage Eight load shedding.” The wide ranging discussion with Chris Steyn includes her take on Government’s Revised Integrated Resource Plan and how National Treasury has “very quietly” incurred a $1 billion debt with the World Bank.

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Relevant timestamps from the interview

00:00 – Introduction
00:28 – Revised integrated resource plan
01:17 – Recently signed memorandum of understanding
03:11 – Funding for the energy transition and bail out for Eskom
07:12 – The three projects that fell off the table in Dec
09:21 – Independant power producers program
10:43 – How long has the minister been in his job?/ Has never met with the Eskom board
11:42 – Not optimistic that his enhanced powers will make difference before the election
12:11 – Smart meter program’s secret funder
14:14 – Other predictions
15:56 – Conclusions

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Highlights from the interview

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Energy Minister Gwede Mantashe has admitted that ESKOM has lied to South Africans about the real load-shedding stages it was implementing.

This has emerged from an interview with Samantha Graham-Maré, the Democratic Alliance’s Shadow Minister of Electricity.

Speaking to BizNews, she says: “Last year I wrote to Eskom to say that we were of the impression that they had been lying to us about the stages of load shedding and that on several occasions we were of the opinion that they had exceeded Stage Six and Seven and actually gone into Stage Eight load shedding. Needless to say, as usual, our requests have been ignored and we will have to be following up on that…

“But the interesting thing is that, in a couple of questions in the last week, Gwede Mantashe has admitted that last year January we went into Stage Eight load shedding. He didn’t state anything further about other months, but it’s the first time that anybody from government has actually admitted to the fact that we did go into Stage Eight load shedding. So we now have it from the Minister of Energy that this has been a case – and obviously we’ve now been lied to by ESKOM because they’ve never ever admitted to going into Stage Eight.

“So we will obviously pursue that again to find out how many times this has happened and how many times we’ve been lied to.”

These are some of the other highlights from the interview:

Government’s Revised Integrated Resource Plan:

“…we’re still busy working through it as the Democratic Alliance so that we can have a proper position on it. At this stage, there are obviously some positives to it, but we need to really drill down into the aspects of it. I mean, it is so long overdue and a lot of it is still worrisome in terms of the fact that they’re reverting back to the standing firm on the coal strategy. They’re not in any rush to eliminate coal as a source for electricity generation in the country.”

The MOU giving the Minister of Electricity more powers:

“I must just tell you, (to my knowledge) he’s never actually met with the ESKOM board. So how you can speak about electricity as an electricity manager, but you’ve never actually sat down with ESKOM and looked at a strategy for the SOE is beyond me.

“Nonetheless, he now has powers over the board and he has some powers ostensibly over the management of ESKOM. So hopefully that’ll allow him to make some inputs in terms of strategy, but he still has no procurement powers. And this is obviously where the problem comes in because…for example, anything related to independent power producers has to be done via Gwede Mantashe. He’s the only one who has procurement powers in that respect.

“So his hands are still extensively tied….I’m not entirely sure that he has any real new powers in terms of the MOU. And until they actually create an electricity portfolio that gives him all control over electricity, I don’t think he’s going to be able to be as effective as he’d like to be.

“I can’t see that he can actually make any major strides in four months anyway. You can’t just give somebody powers and then expect them to turn around a failing, dismally failing SOE in four months. It’s never going to happen.”

The Smart Meter Funding Mystery:

“There’s a European company that’s currently got the contract to do that. So in my questions, I obviously asked about the tender processes and I asked about who’d been awarded it. (Public Enterprises) Minister (Pravin) Gordhan has subsequently come back and said that they might not be the only company that gets the tender. So it’s not even a local company that’s got the tender, it’s a foreign company. So South Africa is not benefiting directly from this massive generalised smart meter installation.

“But the interesting thing is that when Minister (Kgosientsho) Ramokgopa, responded, he stated that ESKOM have budgeted for this project. In other words, he’s now changed his tack from saying that there’s this mystery funder that’s funding the programme to say that this forms part of ESKOM’s budget. So needless to say, I will be drilling down into ESKOM’s budget to find out where they have budgeted for this project and exactly how much they have budgeted for it and whether or not that is the case. But we will still obviously be pursuing the questions around whether or not there really was ever a mystery funder – and if so, who it was.”

ESKOM “backdoor” funding:

“So with the 254 billion rand bailout that National Treasury have given to ESKOM, this was obviously to offset debt and to make them more financially sustainable. One of the provisions of that is that they’re not allowed to incur any new debt as a power utility. So there’s a big problem because obviously…we need about 6,000 kilometers of transmission for the grid. We need to be bringing in new generation capacity, new transmission facilities, et cetera, et cetera, all of which requires funding.

“We also have on the sidelines, the Just Energy Transition, the JEP programme, which is funding that has been put together by the international partners groups. So that’s countries like the UK, Germany, Denmark, Sweden, et cetera, et cetera. So they’ve put together between eight and 11 billion US dollars in funding to assist us with the just energy transition. Now, the problem with that is that we still haven’t got a plan in place. We still haven’t used a single cent of this money that’s available.

“But in the interim, very quietly, as the National Treasury went and incurred a $1 billion debt with the World Bank for what they called just energy transition…my issue around all of this is this, are they circumventing the ESKOM Debt Relief Bill by using National Treasury to now go and incur debt on behalf of ESKOM.

“So is the country’s taking on the debt on behalf of ESKOM to avoid not meeting the requirements of the ESKOM Debt Relief Bill? Why are we not tapping into the just energy transition funding that’s available to us?”

The three projects that fell off the table in December 2023:

“So by the 31st of December, there were three projects that needed to meet specific financial compliance requirements, which they didn’t do.

“Look, I think part of it is that Gwede Mantashe has made sure that any particularly renewable energy projects, the requirements to come on board and to actually be operational are so onerous that it’s almost impossible for these companies to get their ducks in a row in order to meet those requirements. So that has been one of the ways in which he’s managed to sort of avoid bringing in additional IPPs (Independent Power Producers).

“But the one obviously that we are pleased about is the Carpowership deal…particularly after what happened in Africa, where (in) one of the countries, they switched off the entire, like the whole country. Now to me, to have our entire country’s grid in the hands of a private company is a terrifying prospect. I also think that from environmental aspects, I don’t think Carpowership was a good idea. And also, if you looked at the cost of the electricity, it was very, very expensive. So from that perspective, I think it’s a big relief that the Carpowership deal has fallen off.

“But obviously, it is now delaying the improvement of the rollout of the electricity. So let’s hope that there are alternatives in place.”