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Eskom in need of structural reform, says energy expert

18 February 2019 12:52 PM
Tags:
Eskom
Load shedding
Energy crisis
Business model
unbundling
structure
Experts discuss President Cyril Ramaphosa’s plans to change the structure and business model at the power utility.

There has not been enough structural reform at Eskom over the past two decades, says sustainable development specialist Lauren Hermanus.

Eskom has been in the spotlight following plans to change the structure and business model at the power utility as well as load shedding last week.

Read: Eskom unbundling could be South Africa's Brexit, argues economist

President Cyril Ramaphosa announced that Eskom would be restructured in his state of the nation address (Sona) earlier this month.

The power utility will be broken up into three parts including generation, transmission and distribution in a bid to save costs.

Hermanus explains that the structural weakness of Eskom has made it susceptible to corruption, ballooning debt and mismanagement.

The structure of Eskom is part of why it has been such a favourable site or fertile ground for state capture, it's because of this lack of accountability.

Lauren Hermanus, UCT research associate and co-founder of Power Futures SA

Also read: Ramaphosa establishes Cabinet committee to keep watch on Eskom

Hermanus says unbundling is not necessarily a euphemism for privatisation, as suggested by some labour unions.

She says splitting the utility into three entities could allow each part of the value chain to focus on its mandate without conflict of interest.

Hermanus explored the technical implications of the energy crisis and the proposed unbundling plans.

Listen to her analysis on The Eusebius McKaiser Show:

Meanwhile, political analyst Somadoda Fikeni says load shedding and energy insecurity are the biggest threat to South Africa's economic growth.

He argues that patronage and poor maintenance are part of the reason why Eskom finds itself in a crisis.

Fikeni explored the socio-political implications of the energy crisis and the proposed unbundling plans.

Listen to his analysis on The Eusebius McKaiser Show:


18 February 2019 12:52 PM
Tags:
Eskom
Load shedding
Energy crisis
Business model
unbundling
structure

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