Eskom's anti renewable energy campaign puts profits before the people of South Africa

Press release - July 22, 2016
22 July 2016, Johannesburg - Reacting to the media reports regarding the letter written by Eskom’s board chair Ben Ngubane stating that Eskom will not sign any power purchase agreements with private producers after the current round is finalized without further discussion, Greenpeace has said:

“It is unconscionable that Eskom continues to hold South Africans to ransom so that the utility can maintain its stranglehold on the country’s economy and electricity supply, at whatever cost. Although much has been made of Eskom’s precarious financial situation, at the beginning of this month Eskom reported that its profits have surged to four billion Rand for the last financial year, while the price of electricity soars to pay for new investments in dirty coal power. The utility can no longer be allowed to put its short-sighted profit motive ahead of the people of this country.

It seems like no coincidence that Eskom’s latest statement comes only a month after Brian Molefe’s anti-renewable energy rant, when he controversially claimed that renewable energy is sub-standard - at a time when renewable energy is the only technology currently delivering new electricity capacity on time and on budget to South Africa’s constrained grid. By claiming that renewable energy doesn’t deliver, and refusing to sign new connection agreements, Eskom is clearly running an anti-renewable energy campaign, which must be stopped in its tracks.

The utility risks becoming obsolete if it does not shift its business model to ensure that new investments go into renewable energy, instead of threatening to cut off renewable energy projects in the country.

Clearly the fact that Eskom has an almost complete monopoly over electricity production, distribution and transmission is not working and Eskom cannot be allowed to be both referee and player, when the only role that they take seriously is blocking investments that are a threat to their bottom line. Indeed, one of the barriers to rooftop solar in South Africa is that Eskom believes that people producing their own electricity from solar panels is a threat to their profits.

The toxic lack of direction from the Department of Energy [1] plays right into Eskom’s hands, and it is the people of this country who are paying the price. If Eskom will not deliver clean, affordable, safe electricity to the people of this country, then its monopolistic approach to electricity supply must be transformed. There is no doubt that investments need to be made in the country’s grid, but maybe Eskom should not be the entity making them, and neither should they be the entity buying power from other producers.[2]

 

Contact details:

, Greenpeace Africa’s Senior Climate and Energy Campaign Manager +27725608703

, Greenpeace Africa’s Media Officer +254 70 805 6207

 

Notes to the editor:

  1. The Department of Energy has now again delayed the release of the country’s updated electricity plan (the IRP) which has not been updated since 2010, even though it is supposed to be updated every two years. The plan is the basis for making electricity investment decisions in the country.
  2. Since Eskom is clearly not independent, an independent system and market operator should be formed, which is responsible for operating the grid and power procurement.