Comments on: The power crisis http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/ Thu, 09 Sep 2010 21:00:35 +0000 http://wordpress.org/?v=2.2 By: Richard Catto http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101536 Richard Catto Tue, 17 Nov 2009 01:28:07 +0000 http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101536 Thank you for this informative article. I hope you write more on this subject. I blame the Mbeki years for the crises that South Africa is currently dealing with. In my view, Mbeki was the worst thing to happen to this country. Zuma and his cabinet are proving far more capable and rational, despite the many (mostly white South Africans) people who were so opposed to Zuma being elected. Thank you for this informative article. I hope you write more on this subject.

I blame the Mbeki years for the crises that South Africa is currently dealing with. In my view, Mbeki was the worst thing to happen to this country.

Zuma and his cabinet are proving far more capable and rational, despite the many (mostly white South Africans) people who were so opposed to Zuma being elected.

(Report abuse)

]]> By: Free Speech http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101522 Free Speech Mon, 16 Nov 2009 19:08:53 +0000 http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101522 Well, there you have it – even Gospell has seen the light and decided to leave Eskom to the Dark. Next thing we will have even more rot at Eskom which has become unmanageable – 41 late reports to the Board in 12 months by the Exco – so who is actually doing any work at Eskom? http://www.gopetition.com/petitions/stop-eskom-extortion-now.html tx Well, there you have it – even Gospell has seen the light and decided to leave Eskom to the Dark.
Next thing we will have even more rot at Eskom which has become unmanageable – 41 late reports to the Board in 12 months by the Exco – so who is actually doing any work at Eskom?

http://www.gopetition.com/petitions/stop-eskom-extortion-now.html
tx

(Report abuse)

]]> By: Perry Curling-Hope http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101491 Perry Curling-Hope Mon, 16 Nov 2009 13:17:33 +0000 http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101491 Fair analysis. It is only politicians and the constituency they manage to delude who believe that sub economic pricing mandated by government fiat ‘benefits’ the country. Government cannot ‘make something cheaper’ than its true cost, nor ‘create an environment for future prosperity’ by expanding public debt now. All that is achieved is to shift the point at which the true cost must be born to some time in the future. When Eskom offered energy at “ridiculous low” prices, South Africans and industry were not ‘benefiting’, they were trading future viability for present easement. One cannot evade the economic pain resulting from politically motivated resource misappropriations. Seeing the cost of primary energy increase by 45% per annum whilst claiming that CPI and PPI should simultaneously lie within manageable limits of 6% to 7% is an absurd fantasy, devious political footwork, plain lies or all three. Fair analysis.

It is only politicians and the constituency they manage to delude who believe that sub economic pricing mandated by government fiat ‘benefits’ the country.

Government cannot ‘make something cheaper’ than its true cost, nor ‘create an environment for future prosperity’ by expanding public debt now.

All that is achieved is to shift the point at which the true cost must be born to some time in the future.

When Eskom offered energy at “ridiculous low” prices, South Africans and industry were not ‘benefiting’, they were trading future viability for present easement.

One cannot evade the economic pain resulting from politically motivated resource misappropriations.
Seeing the cost of primary energy increase by 45% per annum whilst claiming that CPI and PPI should simultaneously lie within manageable limits of 6% to 7% is an absurd fantasy, devious political footwork, plain lies or all three.

(Report abuse)

]]> By: Peter L http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101453 Peter L Mon, 16 Nov 2009 10:39:57 +0000 http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101453 Capital intensive public utilities such as electricity organisations are "natural monopolies" that need to be properly regulated and funded. Long-term infrastructure should be fininaced thorough long term debt and equity instruments, not from current operation income - a basic accounting principle. The cause of Eskom's malaise is much worse than political shenanigins - coal inventories were deliberatly allowed to run down in order to articifially improve the balance sheet and income statement, resulting in executives qualifying for large bonuses. Eskom's own report confirms that 80% of electricity users in Soweto do not pay a cent. How can you expect to keep a busiess running when your customers do not pay you? There is no political will to recover significant amounts due from certain customers and sectors. Eskom already applies severly differentiated tariffs - both within the domestic residential customer base and between their largest customers - businesses and across our borders. Many SA domestic consumers already heavily subsidise the "free" basic electricity supplied to some domestic users as well as the electricity exported to neighbouring countries, which is sold at a fraction of the price domestic consumers pay. Rising electricity prices will have no effect on the very poor - the ANC will see to that (this is their voting fodder, after all). The burden will be transferred to the middle classes and some business consumers. Government's loan of 60bn is 15.6% of the total 385bn required - peanuts! Capital intensive public utilities such as electricity organisations are “natural monopolies” that need to be properly regulated and funded.
Long-term infrastructure should be fininaced thorough long term debt and equity instruments, not from current operation income - a basic accounting principle.

The cause of Eskom’s malaise is much worse than political shenanigins - coal inventories were deliberatly allowed to run down in order to articifially improve the balance sheet and income statement, resulting in executives qualifying for large bonuses.

Eskom’s own report confirms that 80% of electricity users in Soweto do not pay a cent.
How can you expect to keep a busiess running when your customers do not pay you?
There is no political will to recover significant amounts due from certain customers and sectors.
Eskom already applies severly differentiated tariffs - both within the domestic residential customer base and between their largest customers - businesses and across our borders.

Many SA domestic consumers already heavily subsidise the “free” basic electricity supplied to some domestic users as well as the electricity exported to neighbouring countries, which is sold at a fraction of the price domestic consumers pay.

Rising electricity prices will have no effect on the very poor - the ANC will see to that (this is their voting fodder, after all). The burden will be transferred to the middle classes and some business consumers.

Government’s loan of 60bn is 15.6% of the total 385bn required - peanuts!

(Report abuse)

]]> By: Peter Joffe http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101406 Peter Joffe Mon, 16 Nov 2009 05:08:11 +0000 http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101406 Dear Mandy you seem to have forgotten that we needed arms more than we need new power stations? The current crisis is a small price to pay for jets that cannot be armed, submarines that remain in the docks and a gravy train that needs to be funded. Warnings that were ingnored and comrades who were appointed to positions that they knew nothing about and now "Eisch it's broken" and 'eisch we did not think Eskom needed to be maintained as with hospitals, roads, schools etc etc. Whose to blame? Apartheid of course. Viva ANC Viva. Dear Mandy you seem to have forgotten that we needed arms more than we need new power stations? The current crisis is a small price to pay for jets that cannot be armed, submarines that remain in the docks and a gravy train that needs to be funded. Warnings that were ingnored and comrades who were appointed to positions that they knew nothing about and now “Eisch it’s broken” and ‘eisch we did not think Eskom needed to be maintained as with hospitals, roads, schools etc etc. Whose to blame? Apartheid of course.
Viva ANC Viva.

(Report abuse)

]]> By: chris2 http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101380 chris2 Sun, 15 Nov 2009 14:09:44 +0000 http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101380 I might have missed important points regarding the Eskom story, especially regarding the sudden increase in tarrifs as proposed. During the 1990s there was considerable generation over-capacity which resulted from higher growth projections during the previous decade. Since that time the planning for future demand has apparently been completely neglected, and apparently even the question of long-term coal contracts, which used to be a hallmark of Eskom business. It would seem that the recent crisis was greatly due to mismanaged coal supplies and insufficient spare generating capacity to allow for regular maintenance outages. Eskom seems to imply that their pricing for electricity would have to rise to be equal to the offers they have received from independent suppliers to augment their base capacity. I seem to remember reports that Eskom had been blowing hot and cold to these potential contributors, failing to make reliable and binding offers required for proper planning. To my amateur mind, Eskom would have to stabilise its coal supply medium to long term and calculate its reliable generating capacity and the cost of such. It then can determine the shorfall, if any, now and projected into the future when economic activity accelerates. The potential for buying in electricity from independent suppliers should be assessed, including the price per unit from each source. Presumably these 'expensive' sources would together constitute a small percentage of Eskom's capacity and the overall cost would be a weighted average including their own contribution. This could include 'green' sources. I might have missed important points regarding the Eskom story, especially regarding the sudden increase in tarrifs as proposed. During the 1990s there was considerable generation over-capacity which resulted from higher growth projections during the previous decade. Since that time the planning for future demand has apparently been completely neglected, and apparently even the question of long-term coal contracts, which used to be a hallmark of Eskom business. It would seem that the recent crisis was greatly due to mismanaged coal supplies and insufficient spare generating capacity to allow for regular maintenance outages. Eskom seems to imply that their pricing for electricity would have to rise to be equal to the offers they have received from independent suppliers to augment their base capacity. I seem to remember reports that Eskom had been blowing hot and cold to these potential contributors, failing to make reliable and binding offers required for proper planning.
To my amateur mind, Eskom would have to stabilise its coal supply medium to long term and calculate its reliable generating capacity and the cost of such. It then can determine the shorfall, if any, now and projected into the future when economic activity accelerates. The potential for buying in electricity from independent suppliers should be assessed, including the price per unit from each source. Presumably these ‘expensive’ sources would together constitute a small percentage of Eskom’s capacity and the overall cost would be a weighted average including their own contribution. This could include ‘green’ sources.

(Report abuse)

]]> By: Rory Short http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101373 Rory Short Sun, 15 Nov 2009 10:53:21 +0000 http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101373 @mandy I enjoyed your article. During the past week I listened to Barabara Hogan being interviewed on 702 re the Eskom Board situation. She was straight forward and direct in her answers to John Robbie's questions. When the interview was over I felt a spirit of elation sweep over me. This happened because here at last was someone in authority speaking nothing but the truth with no hidden racial resentments or spin. The fact is South Africa has been bedevilled by racism for centuries. The elimination of racism from a society like ours is not a simple task however. Racist behaviour by individuals and institutions needs to be, and should be, addressed by the Justice system and this will need to happen long term. Racism enshrined in Statutes however can and should be eliminated immediately by revising the Statutes. Unfortunately the ANC has removed Apartheid style laws from the Statute book, which is excellent, but installed in their place its own kind of racist legislation such as Affirmative Action. Racism can never be eliminated from any society which mantains racist legislation, no matter how this retention is rationalised. @mandy I enjoyed your article. During the past week I listened to Barabara Hogan being interviewed on 702 re the Eskom Board situation. She was straight forward and direct in her answers to John Robbie’s questions. When the interview was over I felt a spirit of elation sweep over me. This happened because here at last was someone in authority speaking nothing but the truth with no hidden racial resentments or spin.
The fact is South Africa has been bedevilled by racism for centuries. The elimination of racism from a society like ours is not a simple task however. Racist behaviour by individuals and institutions needs to be, and should be, addressed by the Justice system and this will need to happen long term. Racism enshrined in Statutes however can and should be eliminated immediately by revising the Statutes. Unfortunately the ANC has removed Apartheid style laws from the Statute book, which is excellent, but installed in their place its own kind of racist legislation such as Affirmative Action. Racism can never be eliminated from any society which mantains racist legislation, no matter how this retention is rationalised.

(Report abuse)

]]> By: MK http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101367 MK Sun, 15 Nov 2009 10:11:12 +0000 http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101367 Having lived the life before it certainly to many of us watching from Africa that we have watched this movie before. i am reading Peter Drucker's Managing in the next society and recommend it as well as Incredible Wealth, Alvin and Heidi Toffler. On pg 202 Drucker concludes "whenever in the last 200 years political passions and nation-state politics collided with economic rationality, political passions and nation-state have won". I read Jacobs article and i must say i have to agree with the man and so do a large population of black professionals. if some of the issues he addresses are not faced square, we have wathed the movie before. Having lived the life before it certainly to many of us watching from Africa that we have watched this movie before. i am reading Peter Drucker’s Managing in the next society and recommend it as well as Incredible Wealth, Alvin and Heidi Toffler. On pg 202 Drucker concludes “whenever in the last 200 years political passions and nation-state politics collided with economic rationality, political passions and nation-state have won”.

I read Jacobs article and i must say i have to agree with the man and so do a large population of black professionals. if some of the issues he addresses are not faced square, we have wathed the movie before.

(Report abuse)

]]> By: MLH http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101345 MLH Sat, 14 Nov 2009 19:04:49 +0000 http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101345 I think this may be too simplistic. I would have agreed with you until I saw a couple of pieces that made me sit up...very, very straight. http://www.miningweekly.com/article/chamber-calls-for-new-south-african-electricity-dispensation-2009-11-11 http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aLABciVyWHhA http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afG.TIVXTCtc http://www.miningweekly.com/article/ifm-to-cogenerate-at-tiny-fraction-of-proposed-eskom-tariff-2009-11-12 http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aAaPlGQ53fyc They make the point that electricity can be produced far more cheaply and that politics is strangling our SOEs and power will strangle the SA mining industry. We get into the habit of believing that if the big guns want us to pay, pay we must. I don't believe the proposed increases are realistic. It isn't just the poor who will suffer. We will never recover from the recession if Eskom (allowed by government) goes its own merry way. I think this may be too simplistic. I would have agreed with you until I saw a couple of pieces that made me sit up…very, very straight.

http://www.miningweekly.com/article/chamber-calls-for-new-south-african-electricity-dispensation-2009-11-11

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aLABciVyWHhA

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afG.TIVXTCtc

http://www.miningweekly.com/article/ifm-to-cogenerate-at-tiny-fraction-of-proposed-eskom-tariff-2009-11-12

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aAaPlGQ53fyc

They make the point that electricity can be produced far more cheaply and that politics is strangling our SOEs and power will strangle the SA mining industry.
We get into the habit of believing that if the big guns want us to pay, pay we must. I don’t believe the proposed increases are realistic. It isn’t just the poor who will suffer. We will never recover from the recession if Eskom (allowed by government) goes its own merry way.

(Report abuse)

]]> By: Lionel Byrne http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101324 Lionel Byrne Sat, 14 Nov 2009 13:13:11 +0000 http://www.thoughtleader.co.za/mandydewaal/2009/11/13/the-eskom-power-crisis/#comment-101324 I'm but a senior citizen of our beautiful country and I see it going too the dogs,some of our utility leaders are but politic emplacements who just don't know what the hell is happening.why don't they take advice from experienced people.what did mr Godsell say 'we have screwed up 'surely, put our heads together and sort out this damn mess.I say too ESKOM team come on you guys pull your bloody finger out ,lets get back on track ,we the public know you can do it I’m but a senior citizen of our beautiful country and I see it going too the dogs,some of our utility leaders are but politic emplacements who just don’t know what the hell is happening.why don’t they take advice from experienced people.what did mr Godsell say ‘we have screwed up ’surely, put our heads together and sort out this damn mess.I say too ESKOM team come on you guys pull your bloody finger out ,lets get back on track ,we the public know you can do it

(Report abuse)

]]>