Eskom must stop hiding behind its social-good mandate
The ability to focus on commercial operations and boost efficiency should allow cross-subsidisation between commercial and social-good functions
Eskom is in a crisis. Repeating such sentiments would be an understatement of the deeper malaise of the country because of years of underinvestment, corruption, poor planning and management. South Africans depend on Eskom for their energy needs. Eskom, in turn, survives on tariff increases granted by the National Electricity Regulator of SA (Nersa). The other source of support for Eskom is state guarantees (fiscal resources) that act as surety to enable it to raise capital from debt markets. Eskom is suffering from two decades of neglect, which intensified over the nine years under the Zuma administration. Challenges were bound to surface, given that this is a near monopoly that is vertically integrated and heavily reliant on coal as primary source of energy for nearly 90% of its power generation. Eskom consists of the trinity of generation (turning power to energy), energy transmission (grid lines), and distribution (wholesale). Inefficiencies across these dimensions are reflected ...
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