Chris Yelland: Joburg rejection of Eskom loadshedding shows others the way

The government has found itself in a corner with the energy crisis that Eskom has created. With billions of rand of Eskom debt it has to shoulder and with loadshedding reaching Stage 6 that even lead to mines shutting down; it finally relinquished its grip on power generation in the country and announced that the mines will be allowed to generate their own electricity without a license. But in the true spirit of that' Boer maak 'n plan' spirit that South Africans are known for; Johannesburg has come up with its own solution to loadshedding and while other citizens were counting the minutes until they could charge their devices, the city has announced it would not have the same loadshedding schedule as the rest of the country. In an interview with Alec Hogg, Chris Yelland sheds light on how the city managed that and gives his opinion of Eskom's new CEO and his challenges ahead. – Linda van Tilburg.Content hosted by iono.fm.Chris Yelland who attended the first briefing of new Chief Executive Officer of Eskom, Andre de Ruyter said he was "a very impressive personality" who managed to acquire knowledge of the industry in a rather short time. Although he has a background from his years at Sasol in industry and energy. But Yelland cautioned that this was not a one-man business and that there were 47,000 demoralised employees at Eskom who have to be re-motivated. South Africa, he said was in "the midst of a really severe energy crisis." It could be described as a "crucible" which Yelland said would hopefully bring out De Ruyter's leadership qualities and enable him to inspire his executive team, his board and the layers of management beneath the board and underneath the exco..___STEADY_PAYWALL___.Commenting on De Ruyter's announcement that South Africa is likely to have Stage 2 loadshedding for the next 18 months, Yelland said that when a new leader comes in; it is best to clear out all the closets and skeletons and "tell it like it is with the knowledge that you are not to blame." His jobs is to clear up and clean up and what he has done is to announce a new "philosophy" of maintenance requirements, getting back to basics at Eskom, which is following the requirement of original equipment manufacturers and doing maintenance by the book, as it should be done with plants and equipment. "It has not been done the way it should be done for years." In most of the plants, the mid-life refurbishment, which is really critical after 20 or 25 years of operations has not been done for financial reasons and because they don't want to shut down a plant for extended periods to do deep-level maintenance. So what De Ruyter is doing is to get back to the book. But in the short term it means more outages, planned outages and that means more loadshedding..Responding to the question on why this kind of maintenance had not been done, he said it is due to short-term thinking. Yelland said there were pressures like looming elections or in 2010 there was the World Cup with the international community's eyes on South Africa. These political pressures become enormous and management in its eagerness to please and appease fall into short-term thinking and defer maintenance, thinking they will catch up later. "You then get into a situation with generation capacity shortages and delays at Medupi and Kusile where eventually the only way of catching up, is to shut plants down and go with loadshedding. Politically it becomes very difficult. Politicians start putting a lot of pressure on an organisation and they don't do things they should do. "The message is; you should never let a politician dictate your maintenance policy.".Yelland said it was "wonderful" that Johannesburg could tell its customers that they would not have the same Stage 2 loadshedding as the rest of the country. He said it showed what could be done with distributed generation and if other municipalities were able to do this and did do it, the industrial centres of South Africa could avoid or minimise the disruptive effects of loadshedding on their economies. The way in which Johannesburg city manages it is "the loudest message we have that we should allow distributed generation and that we should allow diversity in the generation sector." He said it is good for the economy and for customers, as Eskom can clearly not meet its obligations. He asked, "why can't customers and municipalities not be part of the solution. This is the future"..Yelland said there is a global trend away from the centralised monopoly generation of electricity to customers in distant places. He said, "the new world of energy is smaller; more flexible generation plants but that doesn't mean to say, there's no room for the legacy big plants and of course you would not shut those down." One of the ways of managing risk, is to encourage diversity. He referred to the statement by Minister Mantashe and said new regulations will be passed that will open up the space for municipal generation and self-generation by customers to relieve Eskom of a burden that it clearly can't meet..Yelland explained how Johannesburg was able to avoid loadshedding. The Kelvin power station near Oliver Tambo airport is owned by an independent power producer and it sells electricity to the city of Johannesburg. "That is exactly what Cape Town is seeking to do; perhaps with gas to power plants and with renewable energy independent power producers (IPPs) in the Cape area". But at the moment, there are regulations that inhibit this; it requires ministerial determination and approval from NERSA and up to now they haven't been giving approval. "Joburg is a legacy power station with an arrangement that dates back years but it's bearing fruits now." And why not extend this to other municipalities, he asked. All the major metros are pushing to generate energy themselves as they did in the past as well as to contract with independent power producers as Johannesburg does and this will help their customers and help to keep costs down. "This is what Johannesburg is doing and why not?".Yelland said many customers want to generate their own electricity; it helps to keep costs down, ensures security of supply and some want green energy because they feel under pressure from their international partners. "And why not? It is done at their own cost." He says Eskom supplies 95% of electricity in South Africa and is designated as the single buyer of electricity for resale under the present system. That is the regulatory framework under which it operates and Eskom sees this new world of electricity as a threat to its business model and to its revenue. Every time that people start self-generation it means less electricity sales for Eskom and when they sell less electricity, they want to put up the price to compensate for declining sales volumes with a higher electricity price. "So, you go into this death spiral of ever-increasing prices causing people to look for alternatives; the sales volumes go down and then Eskom pushes its price up and then more people go off the grid. Eskom sees this death spiral as threatening to its future business model. "But the point is, if it is unable to meet its mandate as it is clearly unable to do; we should not penalise the whole economy. We should allow customers to take control of their own energy future."

Chris Yelland: Joburg rejection of Eskom loadshedding shows others the way

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