The business community is sceptical of plans to establish an electricity generation business outside Eskom, deeming it nothing more than “government talk”.
On Monday, minerals and energy minister Gwede Mantashe said the government had taken a decision to talk to investors to start a generating company outside Eskom and to allow mining companies to generate their own electricity.
Essentially it would be an attempt to alleviate the loadshedding crisis.
Speaking at the 26th Investing in African Mining Indaba in Cape Town, he said: “This reality forced us to take serious decisions. That is why we have agreed that because of problems of energy, we must allow our mining companies to generate energy for self-use. You don’t need a licence for that — you just register and you run ahead,” he said.
“Secondly, we have taken a decision we will talk to investors to start a generating company outside of Eskom. That is a security measure. As Eskom is grappling with all the crises and problems, we must have a fail-safe option for delivering energy.”
But some are doubtful about these developments, given the government’s handling of the power crisis to date.
Economist Mike Schussler cautioned against more “government talk”.
“It is good that mining companies can generate their own power. We need to get more power in the country and Eskom should not be the only solution. It would mean we get less load-shedding,” he said.
“But getting the state to provide the second power company is not ideal.
“The government does not have money to invest in more power, it must be left up to the private sector to open up the provision of electricity, as is the case in many countries in the world right now.”
Border-Kei Chamber of Business CEO Les Holbrook described a second power supplier as “just another structure that government will manipulate and corrupt”.
“He (Mantashe) needs to focus on how to bring the IPP’s (independent power producers) on board. They can help immediately and there will be no need for costly structures, going on a wild goose chase.”
Holbrook said BCM businesses were already suffering because of load-shedding.
“Load-shedding means shut down. Very few (businesses) have generators and those that do, pay big money to keep them running. Generators are expensive and cost a lot in petrol or diesel. You not only lose turnover, but you are still expected to keep the doors open.
“The impact is huge because it affects everyone, from hospitals to factories to hotels to households.”
Eskom said on Monday loadshedding would last until Thursday. The company said it would provide a break in loadshedding from between 6am and 9am each day.
Stage 2 allows for up to 2000 megawatts (MW) of the national load to be shed.
“Load-shedding is necessary due to a shortage in capacity and to replenish emergency reserves during the week,” Eskom said. “We will continue to monitor the system closely and give periodic updates on the status of the power system as things may change at short notice.”