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MORE ESKOM WOES... is that possible?


Gabriël

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On 2019/08/10 at 7:47 PM, Bobster said:

These systems can be quite fragile. It's amazing that they deliver as reliably as they do. Managing a grid is not easy, it seems. 

They are. It is. And a O yes: It is a very skillful art to keep the grids going. 🙂 

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Eskom can be saved, but 1) at great cost, and 2) you have to convince the unions that something has to give. The unions have to be a part of the solution, they have to be on board. Anyway, that's what the EdCon guy says. They had to let people go, they had to close stores, and everyone around the table, including the unions, first had to realise and acknowledge that.

I'd say the first thing they can do is take the budget they want to use for the NHI and use that to save Eskom. Can't run hospitals without power anyway...

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26 minutes ago, DeepBass9 said:

I think it is time to 'cycle the power' on South Africa. Just switch everything off for a week, just to jolt everyone out of the current  malaise.

That gave me an idea.

Today if Eskom is off for a week, the only people who will suffer are the businesses as they still have to pay salaries.

How about this: If a business needs Eskom to be able to conduct business i.e. no Eskom = No income = No salaries, that when there is a Eskom blackout, then no salaries are due.

 

1 hour ago, plonkster said:

... first had to realise and acknowledge that.

If I was a Union, I would call BS because before I would understand, the Gov needs to acknowledge that they have no idea on how to fix the problem and need help urgently.

I know Eskom can be fixed, but I don't know if Eskom has the skills, or if the Gov has the stomach to fix it or even IF SA will back the Gov to fix it.

In our bubbles we live in all is kumbajaa with a hint of roses. 🙂 

I mean, does ANYONE know who is currently on the job FIXING Eskom?
Where are those engineers Gordhan said where going to look at the problem?
Dang, that reminds me, where has Gordhan gone on this matter?

 

1 hour ago, plonkster said:

... take the budget they want to use for the NHI and use that to save Eskom.

Uhm, I thought there is no budget? The money will have to come from some half baked idea of increasing taxes on existing tax payers.

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13 minutes ago, The Terrible Triplett said:

Uhm, I thought there is no budget?

Exactly!

It's a bit of a disguised joke. Rather take the budget that you don't have for the NHI (but are going to spend anyway... somehow), and fix Eskom. And before anyone accuses me of being against healthcare for the poor or some other argument, that's why I added the second part: You can't provide quality healthcare anyway if you can't power the hospital somehow.

Looking at the budget is interesting. Just for scale and perspective. We spend around 260Bn on education annually. I have no issue with this, education is important (we can discuss whether we get our money's worth another day). It's the largest budget item.

The amount estimated that would be needed for the NHI is 250Bn, if I recall, so it's about as much as is already spent on education. In other words, the state must foresee (do they?) that the money is going to come from somewhere. Would be nice if they were to tell us. But once we know... I propose that we delay the NHI by two years and fix Eskom.

🙂

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"An acceleration in economic growth in South Africa could trigger power cuts, with state utility Eskom’s fragile generation system unable to respond to increased demand for electricity.

The energy availability of Eskom’s generation fleet is supposed to be as high as 80%, but is currently as low as 69%, and even a 0.1% rise in gross domestic product could result in outages, Nelisiwe Magubane, an Eskom board member, said at an event organised by Afriforesight in Johannesburg on Wednesday."

See here: Eskom says SA on brink of further power outages

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Where are the engineers reports Mr Gordhan?

Eskom Tells Senior Managers Unit Separation To Take 3 to 5 Years

They can split a atom quick.
You must rip a plaster off quickly.
They can split a atom quickly.
You can liquidate a Co quickly.
So why can you not split a Co quickly? All you need is the will power to do so quickly.

Here is my assessment: 3 years from now has a safety net of the 5 years ... after 5 years another X years ... then nothing. 🙂 

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3 hours ago, The Terrible Triplett said:

You can liquidate a Co quickly.

My wife's boss might disagree. They went into business rescue. The business rescue people took so long to finalise things that literally all the employees started looking for work, thereby removing all hope that the company could be saved at all. Once the top three tech guys resigned it was over.

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3 minutes ago, plonkster said:

They went into business rescue.

Business Rescue is not the same as liquidating a business, not so? 🙂  

4 minutes ago, plonkster said:

The business rescue people took so long to finalise things that literally all the employees started looking for work, thereby removing all hope that the company could be saved at all. Once the top three tech guys resigned it was over.

Sad he had no recourse against them "ensuring" his business was forced to close down / be liquidated. 

To close a business down with all sitting on the street can be done very fast if the "need" is there. 

To split Eskom can be started on Monday morning 8am in order to rescue it.
Private enterprise vs Gov and then how complicated you want to make it.

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read this folks

 

Analysis: The next steps of the Eskom restructuring and turnaround plan revealed…

 

August 24th, 2019, Published in Articles: EE Publishers, Articles: Energize, Articles: Vector, Featured: EE Publishers, Featured: Energize, Featured: Vector

by Chris Yelland, investigative editor at EE Publishers

 

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A leaked Eskom vision and strategy document, apparently prepared by the Boston Consulting Group for Eskom, has revealed the next step of the long-awaited restructuring and turnaround plan for the embattled utility.

Click here to download the latest Eskom vision and strategy document

The document was presented on 22 August 2019 to the Eskom Executive Forum, a group of about 600 senior Eskom E- and F-band managers and executives, by acting Eskom CEO Jabu Mabuza.

Jabu-Mabuza-1-620x396.jpg

The first step of the restructuring of Eskom was announced by the President of South Africa, Cyril Ramaphosa, at his inaugural state-of-the-nation address on 7 February 2019. This step would entail the legal separation of the generation, transmission and distribution activities of Eskom into three subsidiaries owned by Eskom Holdings SOC Ltd.

The next step revealed on 22 August 2019 would entail carving out the Eskom Transmission company from Eskom Holdings into a separate, independent, state-owned company under the Department of Public Enterprises (DPE). This company is often referred to as independent transmission system and market operator, or ITSMO.

After these first two steps, which the leaked document indicates would have a timeframe of five years, Eskom would retain two of its major activities, namely generation and distribution, with each activity housed in a separate subsidiary company.

However, this would surely not be the end-state of the restructuring process. Eskom’s generation activities, and the distribution activities of Eskom and municipal electricity distributors, are the two most troublesome and toxic hotspots that are in most need of restructuring.

These activities are also facing the biggest threats from disruptive technologies in the form of utility-scale renewable energy, distributed embedded small-scale generation, and pervasive, consumer-empowering information and communication technologies (ICT).

In contrast, the current Eskom transmission group does not carry a lot of debt, arrear payments receivable or people. Eskom’s transmission activities and assets are generally considered to be relatively well-managed, well-maintained and reliable, and this is the only part of Eskom that is seen to be functioning reasonably well.

So, for Eskom to simply be left with the troublesome activities, toxic debt and municipal arrear payments of its un-restructured generation and distribution activities, with the crown jewels of transmission carved out and no longer forming part of its business, would be a fundamentally flawed and misguided vision and strategy.

Indeed, it would perhaps be more rational and preferable for Eskom to morph from being primarily a generation company (as it is now), to becoming the state-owned ITSMO itself, and divesting from its problematic generation and distribution activities.

Thus, the as-yet unannounced end-state for the power generation and electricity distribution industries could perhaps be Steps 1 and 2 as already announced, but with Steps 3 and 4 still to follow, as detailed below.

Step 3 should be the creation of a competitive generation sector. This could be in the form of a handful of unbundled former Eskom generators, a limited number of public-private partnership (PPP) generators, a few hundred renewable energy and other independent power producers (IPPs), and a several thousand distributed, small-scale, embedded generators.

This diverse group of generators would deliver generation capacity and energy to the ITSMO (perhaps in the form of a “new” rejuvenated Eskom), with the generators competing for access to the grid on level playing fields and on economic grounds via an electricity market managed by the ITSMO.

There could also be bilateral contracts between generators and industrial/mining customers, wheeling power through the grid, and paying wheeling fees to the ITSMO.

The final Step 4 of the restructuring process would surely have to be the rationalisation of the dysfunctional electricity distribution sector into a handful of financially viable and better resourced, independent, state-owned, regional electricity distributors (REDs). These would be formed from the remnants of the current 185 municipal and six Eskom electricity distributors.

A competitive retail electricity sector selling electricity to consumers should also form part of the restructured electricity distribution industry, offering of all manner of bundled retail pricing packages and services, as we see in other jurisdictions and sectors, such as for smartphone voice and data airtime.

Following the presentation by acting Eskom CEO Jabu Mabuza to the Eskom Executive Forum on 22 August 2019, Eskom has since met with organised labour unions NUM, NUMSA and Solidarity to “strengthen relations” and share its vision and turnaround strategy.

It has further been established that a joint task-team is being established between government and organised business to engage on Eskom restructuring to develop an action plan for the restructuring.

Such engagements are seen as kick-starting the discussions on Eskom’s vision and turnaround strategy for the future, and it is expected that these will be followed by further discussions with other stakeholders.

What the leaked Eskom vision and strategy document reveals

The leaked document presented by acting Eskom CEO Jabu Mabuza says that Eskom is in a utility death spiral with an outdated and unsustainable business model, with operational and structural inefficiencies, and a lack of transparency, in a rapidly changing in energy landscape.

The document says that Eskom ran out of cash and came close to complete collapse on multiple occasions in 2019, and that if nothing is done, Eskom will collapse and bring down South Africa.

The turnaround plan presented by acting Eskom CEO Jabu Mabuza in the leaked document is based on:

  • Debt relief in the form of government support and debt restructuring.
  • Revenue management through electricity price increases and better collection of arrear debt.
  • Cost-cutting initiatives
  • Restructuring the business into sperate generation, transmission and distribution companies.
  • Operational stability through improved energy availability factor (EAF) and security of supply.

From the vision and strategy revealed in the document, it is clear that Eskom sees itself in the future as an electricity generation and distribution company, and not a transmission company. The transmission activity would be carved out of Eskom into a separate ITSMO outside of Eskom Holdings.

The document presents a three-step restructuring plan with a five-year timeline, as follows:

  • Step 1: Functional ring-fencing, into generation, transmission and distribution units within Eskom.
  • Step 2: Legal separation of the generation, transmission and distribution units into separate subsidiary companies owned by Eskom Holdings.
  • Step 3: carving the transmission company out of Eskom Holdings into a separate, state-owned grid company (ITSMO) under the DPE.

In the document, Jabu Mabuza calls on approximately 600 Eskom E- and F-band managers and executives of the Executive Forum to provide and show buy-in, input, commitment and leadership, rigorous and disciplined execution, tangible results, and clear and consistent messaging.

In the document, Eskom looks to future growth through finding new customers, introducing a lower-carbon energy mix, becoming a renewables player, electric vehicles and e-mobility, energy storage, micro- and mini-grids, and the expansion of smart grids.

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On 2019/08/22 at 2:01 PM, seant said:

Aahh yes the elusive 0.1% growth really something to aim for. So basically unless we're in recession we're going to have load shedding which in turn will probably result in recession anyway.

I think that quote is Eskom's way of pointing out that they are right on the edge of having to load shed.

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Sadly this quote is the issue and is needed before all the other bits can be done.. ie. immediately!  Highlighted in RED for Government attention 😡

"Revenue management through electricity price increases and better collection of arrear debt."

 

image.png.b5211b1ea5ce8dc072569e648cdcb3bb.png

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On 2019/08/24 at 7:07 PM, The Terrible Triplett said:

Business Rescue is not the same as liquidating a business, not so? 🙂  

Sad he had no recourse against them "ensuring" his business was forced to close down / be liquidated. 

To close a business down with all sitting on the street can be done very fast if the "need" is there. 

To split Eskom can be started on Monday morning 8am in order to rescue it.
Private enterprise vs Gov and then how complicated you want to make it.

I once went to a mine site in Zim to do some training for them, arrive on site Monday, eveyone is perusing the contents of their brown envelopes that landed on their desks. Monday afternoon everyone is in the pub drowning their sorrows. 

Tariff increases will be dangerous, as we are not too far from the point where it is cheaper for urban customers to go off grid. If they push it to the point where commercial and industrial customers go off grid, then they will just accelerate the death spiral. I don't actually see anything in that statement that has anything near the type of radical change that is required.

 

Edited by DeepBass9
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On 2019/08/26 at 11:22 AM, Mark said:

Sadly this quote is the issue and is needed before all the other bits can be done.. ie. immediately!  Highlighted in RED for Government attention 😡

"Revenue management through electricity price increases and better collection of arrear debt."

 

image.png.b5211b1ea5ce8dc072569e648cdcb3bb.png

Electricity generation for dummies - by Dummies

Listened to Ted Blum on ENca today. 

We are in deep sh*t 

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13 hours ago, Johandup said:

Listened to Ted Blum on ENca today. 

Again, her is probably right, but it would be lovely to get more "spokespeople" on this topic. At the moment it's just him, and as I said before, I get the feeling he has an axe to grind.

I also read this yesterday. Also makes valid points, but again 1) it's a billionaire talking, his view is going to be at least somewhat removed from reality, and 2) He's looking at how well things have gone since 1994 while I think most people will admit that up to around 2007 things did go rather well...

So with each one, I find that they get some things right, but I also get that feeling that personal prejudices needs to be taken into account for all parties 🙂

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13 hours ago, plonkster said:

Again, her is probably right, but it would be lovely to get more "spokespeople" on this topic. At the moment it's just him, and as I said before, I get the feeling he has an axe to grind.

I also read this yesterday. Also makes valid points, but again 1) it's a billionaire talking, his view is going to be at least somewhat removed from reality, and 2) He's looking at how well things have gone since 1994 while I think most people will admit that up to around 2007 things did go rather well...

So with each one, I find that they get some things right, but I also get that feeling that personal prejudices needs to be taken into account for all parties 🙂

The one fact that he stated is the current board has been in place for 18 months.

They have put nothing new in place and not one criminal has been prosecuted.

The term “state capture” is a soft term as it is fraud in legal terms.

Browsed the Adrian Gore report and it is “blah blah blah”

My 1c .....

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4 minutes ago, Johandup said:

The one fact that he stated is the current board has been in place for 18 months.

True, and tonight they actually had someone else on the KykNET news program, someone from the EIUG, who also pointed out that this organisation is so enormous that it will take 3-5 years to break up, but they have no choice, they have to reduce the workforce.

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