Despite the government’s vows to fix it, South Africa’s power crisis has been dragging on since 2008. The country’s decrepit and poorly maintained power plants, run by the state-owned company Eskom, can’t supply enough electricity for the nation. Legal and technical hurdles have held up plans to buy more power from private suppliers. President Cyril Ramaphosa, who faces a tough re-election in 2024, appointed Kgosientsho Ramokgopa as the new electricity minister in March to tackle this crisis. But Ramokgopa has not made much headway in reforming Eskom. In December, Dan Marokane became the new CEO of Eskom, the 15th person to take the helm since 2007.

Eskom has been suffering from financial losses, poor planning, and corruption scandals. During the nine-year rule of former President Jacob Zuma, Eskom’s management was in disarray, and a judicial inquiry found that Zuma’s allies tried to plunder the company with his blessing. Zuma denied any wrongdoing. Eskom’s leaders have argued that they can’t charge enough to cover their expenses. Andre de Ruyter, who resigned as CEO in February, wrote a book that accused politicians and Eskom’s new board of meddling with his work. Pravin Gordhan, the minister overseeing Eskom, dismissed those allegations.

Marokane, who used to lead Eskom’s group capital division, will assume the CEO role by the end of March after a lengthy and contentious search process that strained the relationship between Gordhan and the board. In October, Mpho Makwana quit as Eskom’s chairman and was replaced by Mteto Nyati, a former executive at telecoms company MTN Group.

Load-shedding is darkening South Africa’s prospects

Eskom’s intentional power cuts, which can last hours, affect water supply, food safety, and health care. These power cuts, known as load-shedding, harm businesses and deter investors in a country that depends on electricity for its key industries, such as mining. The government estimates that the power cuts cost the country 300 billion rand ($15.8 billion) in 2022. The central bank and the National Treasury project that the economy will grow by less than 1% this year, not enough to keep pace with the population growth.

The National Treasury is giving Eskom 254 billion rand in debt relief over three years, which will help it pay for repairs and upgrades to its transmission and distribution network. The bailout unveiled in February will also increase the oversight of Eskom, and allow private partners to help run its plants and transmission network. The government has also made it easier for companies to build their own power plants, by removing licensing requirements. They will also be able to sell their surplus power to the grid.

Coal is king in South Africa

South Africa has a lot of coal, and 90,000 people work at mines that supply Eskom. The ruling party, the African National Congress, is reluctant to disrupt the industry, especially because mineworkers are an important voting group. Eskom was founded in 1923 and quickly built coal-fired plants, driven by the needs of its gold mining industry, the world’s largest. In the 1970s, it started building a new fleet of power stations that still operate today, along with the only nuclear plant in Africa.

In 2007, it announced plans to build two huge new coal-fired plants — Medupi and Kusile — that were supposed to be finished within eight years at a total cost of 163 billion rand. However, the construction process has been marred by labour unrest, mismanagement and equipment defects. The likely final cost has soared to more than 460 billion rand and both facilities are still not running at full capacity.

The country’s dependence on coal, the dirtiest fossil fuel, for four-fifths of its power has consequences beyond its borders. When burned, coal emits almost twice as much carbon dioxide as natural gas. Getting countries to move away from coal is part of the global effort to limit climate change. At the COP26 climate summit in Glasgow in 2021, the US, the UK, the European Union, Germany and France offered South Africa $8.5 billion in funding to help it switch to more climate-friendly sources of energy. However, government officials have suggested that coal plants could be kept running beyond their planned retirement dates because of the severe energy shortages.

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