Potential ministerial conflict could dim SA’s lights in the fight for control of Eskom.
Strategic insights
The days of gambling with our energy sovereignty and energy guarantees are over.
The new Government of National Unity (GNU) Cabinet is the buzz story on all news platforms and everyone’s social media timelines. There is a lot of discomfort and complaints about the way in which some portfolios are structured.
Some departments have been merged to reflect some decree of uniformity – even though it still remains a mix-masala Cabinet with all members of GNU assembled from different parties.
The new ministers now in charge of Eskom’s energy, electricity and minerals are:
∎ Minister of Electricity and Energy Dr Kgosientso “Sputla” Ramokgopa (ANC) and Samantha Graham (DA) as deputy minister, potential future conflict.
∎ Minister of Minerals and Petroleum Resources Gwede Mantashe (ANC) and Judith Nemadzinga‐Tshabalala (ANC) as deputy minister, no future conflict.
∎ Minister of the Department of Forestry, Fisheries and the Environment (DFFE) Dr Dion George (DA), with Narend Singh (IFP) and Bernice Swarts (ANC) as deputy ministers, definitely future conflict.
From a glance at the newly-established line functionary departments responsible for Eskom, you can clearly see a potential future clash in all areas of Eskom’s legislative mandate.
This will be coupled with an oncoming board, executive and operational conflicts of interest represented in the various political parties now contesting for control of the power utility.
This conflict will rise out of the fact that the various political parties represented in this portfolio have contesting and conflicting policy positions.
President Cyril Ramaphosa in his line up for the energy sector has thrown a cat among the pigeons in the fight for the energy crown, and leadership of the energy sector. Huge pecking-order battles will ensue in the coming months over the battle for the control of Eskom.
These key ministers will be tested beyond their capacity limits. We can only hope that the current sterling achievements gained by Eskom by keeping load shedding permanently suspended can be sustained.
The new Cabinet ministerial seat allocation to the different parties is highly concerning, and will over time start showing cracks if the different parties leading the government do not agree on a policy trajectory.
The three ministries that control the energy and electricity sector appear to be separated finally, but there is a challenge in that mix…
Ramokgopa has just cut his teeth in the previous 6th administration just over a year as minister. He is a trusted player and key figure responsible for Eskom managing the end of the load-shedding crisis, together with his All-Stars Team at Eskom. He has also stepped on toes, especially when he called for the reopening and recommissioning of Komati power station to be back in operation.
Then there is the new Minister of the DFFE George (DA). DFFE is in charge of key operations at Eskom. For instance the DFFE minister at some point in the future could decide that it is not DA policy to continue supporting the use of coal and fossil-fuelled power stations and impose heavy emissions requirements.
Thus a possible situation for potential conflict over carbon-dioxide emissions requirements between the ministries seems possible. If the DFFE decides to play hard ball and impose stringent emissions standards, those imposed minimum emissions standards (MES) requirements from the DFFE will have a hard knock-on effect on how Eskom operates and generate electricity.
That would mean power stations may find themselves in a precarious situation where they will be forced to temporarily shut down and cease operations due to imposed MES standards requirements, leading to the return of load shedding in the process. If load shedding returns as a result of such actions, that will impact millions of industrial and household customers in South Africa and knock the economy.
As such a situation of uncertainty might emerge due to the fact that the ANC mandate has been split, and it is no longer in full control of a key department in the energy cluster. While the DA is in control of the Environmental Affairs Department.
The ANC strongly supports continuing coal and fossil fuel-use and nuclear energy, and completely supports the IRP19 plan for an energy-mix policy as well as the coal industrialisation strategy. On the other hand the DA is not in support of coal and fossil fuels. This is where the conflict will emerge.
The two over 60% leading parties in the GNU Cabinet are the ANC and the DA, collectively they ought to be making decisions for the government on energy and electricity policy framework. Will the DA allow the ANC to continue supporting coal and nuclear power? Or will the DA use its power to exert pressure on the ANC in shutting down more coal power stations and replacing them with solar and wind plants through its control of the Department of Environmental Affairs?
The DA is highly in support of deregulation and privatisation of the electricity generation and distribution sector in South Africa. The DA is staunchly pro-renewables (wind and solar) and anti-coal and anti-nuclear energy.
In the long-term survival of the GNU coalition government, how would you reconcile these major contradictions in both the ANC and DA’s policy contradictions?
Meanwhile, Mantashe in the Department of Minerals and Petroleum has been a strong unshakeable supporter of the coal and nuclear industry. In opposition to this view, the DA has never made it a secret that they do not want Mantashe as the minister in charge of Eskom and the energy sector. So how will the two parties now work together?
Furthermore, an ANC resolution will see some state-owned entities move away from the Department of Public Enterprises. The DA in the past has slammed an ANC plan to move Eskom away from Public Enterprises and into the Ministry of Energy.
But in the power-pecking order even though the Energy Department was removed from the Minerals Department, the Minerals Department is still the largest contributor towards Eskom power stations feedstock and petroleum products.
But this is not the time for power squabbles. South Africa needs coherent short and long-term energy policy certainty and confidence that it can keep the lights on to drive growth and investment confidence. The days of gambling with our energy sovereignty and energy guarantees are over.
Building brand new power stations is not an option, it is a necessity!
The public will heavily punish the GNU government if they are set on gambling with the energy sector in the 7th administration. If load shedding returns it will have the nation in an uproar. GNU, despite its differences and different policy stances, needs to work together to strengthen power generation and not undermine it. Failure is not an option.
Crown Prince Adil Nchabeleng is president of Transform RSA and an independent energy expert.
* The views in this column are independent of “Business Report” and Independent Media.
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