2015.03.13 FMF Media Comment: “Eskom Board commissions independent enquiry”

  Media Comment



Progress through freedom


Free Market Foundation Media Comment
March 13 2015 


Despite what Eskom Chairman Mr Zola Tsotsi told the media yesterday morning, this most certainly is a crisis, which will only get worse. The most important point, and the priority item on government’s agenda, should be to end the Eskom monopoly which actively prevents Independent Power Producers (IPPs) getting access to the grid to supply the electricity that South Africa so desperately needs.

There are IPPs ready and willing to supply power and lessen the strain on the national grid in the short and medium term, yet Eskom has all kinds of excuses, none of which stand up to scrutiny, as to why IPPs cannot gain access to the grid. For example, Eskom has said that, currently, there is not enough capacity on the grid to bring in IPPs, yet there appears to be capacity for the renewable IPPs.

For years, sugar companies have been ready to supply Eskom with power. They produce power for themselves using bagasse as fuel and have the capability to produce additional electricity to supply to Eskom. But Eskom routinely quotes rock bottom prices which renders this action financially unviable for the sugar companies, and instead, at a very high price, uses diesel 24/7 to keep the lights on. Even if IPPs supply electricity at a higher price than existing Eskom plants, if diesel turbines were used, as designed, for emergencies only, this would greatly improve matters.

Why are barriers to entry into the electricity supply system allowed to remain?

Yesterday’s announcement is yet another sign that the Eskom monopoly should be split up and IPPs allowed to enter the electricity market before further damage is done to the economy and our international investment status.

It is bizarre that the SA economy is reliant on one single dinosaur monopoly whose inability to keep the lights on has been exposed. Imagine such a situation occurring if we were reliant on only one government food retailer, a state monopoly food retailer? Their failure in the ability to provide food would mean everyone would starve because there would be no other supplier. The same reasoning must be applied to modern power generation. The case for there to be more IPPs to generate power and feed it into the national grid is overwhelming, not just renewables but also for base-load.

If there is no crisis, as the Eskom chairman again says, then why have the top four executives, including the CEO and CFO, been suspended pending a three-month enquiry?


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