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The South African power utility Eskom should be broken up, according to Ian McRae, a former Chief Executive from 1985-1994 of Eskom.
E-World 2025
He said that Eskom’s vertically integrated monopoly structure that generates, transmits and distributes power should be unbundled into a number of individual competing companies, to introduce diversity and competition in generation. He spoke of the need for an independent system operator – separate from Eskom – as well as an effective and independent regulator. He claimed that the National Energy Regulator of SA “appeared to be too readily influenced by the government.” He also noted a need to diversify from coal-based power to include nuclear energy and to depoliticise Eskom.
The problems facing Eskom were highlighted on Tuesday when it announced the possibility of a worst case scenario during the football World Cup, which starts in three weeks' time. It said cold weather combined with high demand could create a situation where South Africans would be asked to turn off all electricity except televisions, which should be kept on to monitor updates from Eskom.
The way for a restructuring was opened by President Jacob Zuma who said in his State of the Nation address in February that the government would look at the participation of independent power producers and the creation of an independent system operator. Zuma said: "To ensure reliable power supply, we have established an inter-ministerial committee on energy, to develop a 20-year integrated resource plan."
However, McRae pointed out that a white paper detailing an energy policy had been submitted to the cabinet 12 years ago, calling for the restructuring of the industry.