Eskom chief executive André de Ruyter is pushing ahead with the unbundling of the debt-ridden state power utility, in a bid to attract private investment.
De Ruyter said in a Digital African Utility Week webinar on Tuesday (24 November), that the unbundling will include the full separation of the utility’s three divisions: generation, transmission and distribution by March next year.
Provided that all regulatory approvals are obtained, De Ruyter hopes to have legal separation of transmission by December 2021.
“And that, I think, will be a very important milestone to attracting additional private investment into generation,” he said.
De Ruyter said that other key focus areas are addressing the utility’s R488 billion debt burden, and obtaining ‘operational stability’ with next April and September 2021 flagged as goal dates.
“The very negative impact of load shedding on the economy is well known and it’s something that we wish to put behind us as quickly as possible,” he said.
“By April of next year, we should see a change in the reliability of our generation system. And then by September of 2021, we should see the risk of load shedding substantially reduced.”
To control costs, the utility has cut its workforce by 2,000 people.
“We’ve already over the past 10 months said goodbye to 2,000 employees,” said De Ruyter. “So we are making some progress. There’s more to come. And that’s of course without resorting to forced retrenchments.”
In addition, Eskom management will not receive increases or bonuses this year.
“Very important, is to address the legacy of capture and corruption and turning around the morale of our people,” said De Ruyter.
“You can imagine that morale is low, people are feeling quite despondent. We have taken a decision not to give any increases to management this year. Also, in order to contain our costs, there will be no bonuses.”
Eskom has cut its workforce in recent years as it continues to struggle with rising debt, approaching some R500 billion.
Its headcount fell to 46,665 employees in 2019, about 4% lower than the previous year, but wider staff cuts have been rebuked by labour unions.
The group’s integrated report for the year ending March 2020 shows that total group employees stand at 44,772.
A drive to shift South Africa’s electricity production to renewable energy could further threaten as many as 120,000 jobs at coal mines and power plants that use the fuel, research consultancy TIPS has warned.
On the global shift to renewable energy, De Ruyter said Eskom’s just energy transition (JET) project office will navigate the utility’s move away from coal in a way that does not “jeopardise” livelihoods.
“I think moving away from a model that’s been around for 97 years, which is how long Eskom has been in existence, to something that is different, is always regarded as potentially threatening by a variety of stakeholders,” he said.
“Obviously, as we make the energy transition, increasingly moving to renewable energy, you can imagine that that provokes alarm amongst the ranks of communities and workers who’ve invested generations in coal as a commodity, whether it’s mining or whether working in a coal-fired power station. And we therefore have.”