South Africa: De Ruyter’s Eskom exit shows renewable energy the only solution

By David Whitehouse
Posted on Thursday, 15 December 2022 15:38, updated on Friday, 16 December 2022 10:24

Andre de Ruyter, former chief executive of Eskom, speaks at a media briefing in Johannesburg, Jan. 31, 2020. REUTERS/Sumaya Hisham

The resignation of Eskom CEO André De Ruyter won’t do anything to fix load shedding in South Africa.

To deal with corruption, there is a need for political leadership and confrontation, which has so far been lacking, say critics of the government’s energy policy. It will also require an acceleration of the country’s shift towards renewable energy.

Cyril Ramaphosa has repeatedly promised – before and since becoming president – that load shedding would become a thing of the past. However, it has become a pervasive part of daily life. Eskom currently has 6,618 MW of capacity offline due to planned maintenance, with another 15,996 MW unavailable due to breakdowns.

On December 14, De Ruyter said he was standing down. He will stay in office until March 31 as a successor is sought. The outgoing CEO was the victim of legacy problems, such as ageing coal power stations that were not properly maintained, says Sampson Mamphweli, a professor of renewable and sustainable energy at Stellenbosch University. He “did not have a full comprehension of the challenges” when he pledged to end load shedding,  Mamphweli says. “He was basically misled.”

  • “De Ruyter was not a problem at Eskom,” Mamphweli says. “He was under severe pressure from the politicians”, and the wider population.
  • Mamphweli is optimistic that load-shedding can be overcome if a plan to split Eskom into three business units is fully implemented, and the units get adequate financial backing.

Battling corruption

Others argue that more radical changes, extending well beyond Eskom, will be needed. De Ruyter was handed a “poisoned chalice and did a remarkable job without explicit political support”, says Paul Miller, a former Nedbank mining and metals investment banker who now runs the AmaranthCX consultancy in Johannesburg.

A long list of senior Black South African executives declined the job before De Ruyter accepted it, Miller says. According to him, real progress on fixing load-shedding is impossible while the ANC remains in power.

The appointment of De Ruyter, who became CEO in January 2020, saw him take over an organisation which had “to a large extent succumbed to state capture”, says Simon Hudson-Peacock, a mining analyst at S2 Research in Cape Town. To achieve the goals he was appointed for, he needed to unravel the “corruption and incompetence” in Eskom, for which the full backing of the president and the minister of state-owned enterprises was essential, Hudson-Peacock says.

  • However, Ramaphosa, Hudson-Peacock notes, stayed silent in the face of political attacks on De Ruyter.
  • Last week,  Gwede Mantashe (the minister for mineral resources and energy) accused him of “actively agitating for the overthrow of the state” by allowing unnecessary load shedding.
  • De Ruyter, Hudson-Peacock says, “must have realised that he had become an impotent force”.

Renewable energy

One of Mantashe’s more measured objections was that De Ruyter, who has law qualifications and an MBA, lacked the right technical background for the job. That claim is a “red herring” as his technical decisions were by all indications in line with the recommendations from his technical staff, says Hartmut Winkler, a professor in energy at the University of Johannesburg.

To turn Eskom around, De Ruyter would have needed to both secure the speedy construction of a huge number of new power plants and at the same time eradicate “criminal elements feeding off Eskom”, Winkler says.

  • “Both of these are ultimately out of his hands, and instead require strong and focused government support and intervention,” Winkler says. “Instead, the government often did the opposite and used him as a convenient scapegoat.”
  • “There is no messiah out there that will turn Eskom around. Whoever takes over will soon be subjected to similar attacks, and won’t last long either.”

The coal plants, which in theory should produce 85% of South Africa’s electricity, have mostly reached the end of their useful lives, due to their age and poor maintenance, Winkler says. “They will never be fully rehabilitated, so the best Eskom can presently do is to let them hobble along”, at considerable cost until they grind to a halt. “New power generation capacity needs to be boosted on a massive scale, and this can only be achieved through renewables,” Winkler says.

He sees no sign of the political will required.

  • “There are too many powerful vested interests at play here, and many of these benefit from a coal-intensive, dysfunctional Eskom,” he says.
  • Structural changes at Eskom, Winkler argues, will not have much impact unless they are accompanied by a strong push by government and society to reclaim the state and to fix the energy crisis, along with other crises such as the country’s crumbling roads.
  • “South Africa effectively needs another turning point like it experienced in 1990-1994.”

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