What Eskom Needs to Make a Comeback

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What Eskom Needs to Make a Comeback

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If John Travolta could revive his career, than anything is possible – but will we have reliable energy in 2016?  2015 was by no means an easy year for Eskom, with the energy supplier coming under a great deal of pressure from South Africans who both wanted electricity, and wanted to know exactly why they didn’t have it.  The simple answer was that a lack of maintenance had made it impossible to keep up with current demands, but this was cold comfort in the eyes of so many sceptics.

As Nersa (National Energy Regulator of South Africa) questions Eskom regarding its decisions of late, it has come to light that the energy supplier’s spending is out of control.  It has been disclosed that Nersa approved a spend of R10 billion over five years to be dedicated to open cycle gas turbines.  However, in the space of just one year the energy company has already spent R8 billion.

Nersa is battling to understand this, given that the spend of R10 billion was requested by Eskom itself, indicating that this should have been sufficient for the five year period.  A spokesperson for the company says that this did not allow for such great demand, and that the money was spent in prevention of further scheduled blackouts.

What this Means for Eskom

The national energy supplier registered a very bad year in 2015, experiencing a loss in revenue of close to R12 billion.  The company says this was as a result of a lower overall demand.  Possibly in an attempt to recoup some of this lost revenue, Eskom has decided to start supplying Zambia with electricity, offering the Southern African country upwards of 50 megawatts of peak power and 300 megawatts of off-peak power.

Granted, the company provided stable power near the end of 2015, but is this a wise decision based on the current circumstances within South Africa?

Powering the Future

Is South Africa seen as a developing nation?  If so, then reliable energy is more important than ever.  Research on the topic has shown that wealth creation is directly linked to electricity usage.  So, for the economy as a whole to flourish, we need sustainable energy.

The national energy supplier understands this and has begun the process of bringing nuclear power to the rescue.  However, this process is expected to take up to 15 years to implement and cost R1 trillion.

But, if the country is to have an economy able to support this, we need short-term solutions.  The best bet for the moment is to increase efficiency through better budgeting and wiser spending.  After all, we don’t want to be buying a sports car when we can’t afford the petrol.

Image credit: http://www.702.co.za/articles/1144/7-steps-to-save-eskom

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