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Eskom needs to lose top-down approach – Rossouw

Mike Rossouw

Mike Rossouw

Photo by Duane Daws

24th March 2015

By: Megan van Wyngaardt

Creamer Media Contributing Editor Online

  

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Power utility Eskom needs to change its structure from a top-down approach, to a bottom-up strategy, as the former was creating “enormous problems”.

Speaking at the Power & Electricity World Africa 2015 conference, in Johannesburg, Eskom adviser and thought leader Mike Rossouw noted that, with a top-down approach, it was impossible to predict how the bottom-up approach was changing.

“You will remember that, in South Africa, we adopted a policy of consolidating regional electricity distributors, or Reds,” he pointed out.

In the 1990s, the South African government set out to restructure the domestic electricity distribution industry through the consolidation of municipal and Eskom electricity distributors into six Reds that would serve the entire country.

“Red 1 was the first one to go operational and then the whole system came to a standstill.

“The objectives of the policy were honourable as far as getting the economies of scale and distribution that did not exist, even today, save for a few of our metros. So, the idea was to try and integrate these large Reds to areas where there was financial and critical mass to become viable.

“[This] aimed to reduce the backlog of maintenance problems that we had in the distribution [divisions]. But again, a top-down approach was taken – rather than taking the approach of saying, why don’t we forget who owns the networks and rather talk about services providers and how best to provide [those service].”

Rossouw added that the old paradigm of the power system was suppliers versus consumers. “This has changed in as far as that, in the good old days, the power plan was that everything that was generated was dispatchable and everything that was consumed is forecastable.”

He noted that a change had come about, as the current generation had become much more flexible, not just in terms of what it could provide, but also its location. “Transmission and distribution becomes a lot more controllable if it is integrated. Consumers have become producers,” he added.

Rossouw highlighted that “we have only seen the tip of the iceberg”.

“Imagine if this trend continues, which I think it will, what it is going to do to the equation of power supply. Therefore, we can’t forecast exactly what consumption demands are going to be because the consumers of the past are now becoming producers,” he said.

THE FUTURE
Meanwhile, Rossouw noted that the shift of power only flowing in one direction – from the producer to the consumer – to flowing up and down – from producer to consumer and from consumer to producer – was also becoming an occurrence in South Africa.

“We are seeing the appearance of zero energy homes, particularly with rooftop solar.

“It poses a very different challenge. . .[People argue that] through rooftop solar, they reduce the requirements for a very strong distribution network. This is actually not true.

“You need a network to supply and consume power.” However, he added that, because there “are more players in the industry that provide transparency and competition, the industry becomes more efficient.

If you look at the house of the future, it is “nicely” integrated into the power system, with smart meters dictating the use of power in the house. “This is something that we should have installed years ago. In fact, we are now struggling to keep the prices low to install these smart meters.”

PRIVATISATION OF ESKOM
Also speaking at the event, former Eskom CEO Jacob Maroga said certain parts of Eskom were already privatised.

“The new independent power producers are already in private hands, the borrowing problem of Eskom is in private hands, the next station to be built is in private hands. It will evolve there. Privatisation will evolve,” he added.

Asked about his view on the privatisation of Eskom, Rossouw told Engineering News Online that he did not think that it was a viable idea. “We should continue with the introduction of private power producers, but the breaking up or privatisation of Eskom at this stage makes no sense whatsoever.”

He added that the transmission and distribution division of Eskom was working “extremely well”.

Further, when asked about Eskom’s expenditure on salaries and bonuses, Rossouw said these figures were “overstated” and that “no bonuses” were being paid at the moment, while salaries had been capped or were below inflation.

“The real issue is to ensure that we retain and continue to attract the skills necessary to turn Eskom around. That must be the focus,” he concluded.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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