What 14 years of load shedding taught us about centralisation - Fin24

29 January 2021 - I was startled to discover that we are now entering the 14th year of load shedding. You may remember the chaos that erupted in late 2007 when South Africans faced rolling blackouts for the first time: robots stopped working, the streetlights went out, and peak-hour traffic became a nightmare at night-time.

I was startled to discover that we are now entering the 14th year of load shedding. You may remember the chaos that erupted in late 2007 when South Africans faced rolling blackouts for the first time: robots stopped working, the streetlights went out, and peak-hour traffic became a nightmare at night-time.

Back then, the African National Congress (ANC) had already been in power for over a decade (as it continues to be now), but Thabo Mbeki was the president of the country and Fikile Mbalula headed the ANC Youth League. South Africans were perturbed at the power outages, but most of us still had faith that the supply problems would be resolved at short notice and that load shedding would soon become a thing of the past.

How wrong we were.

Today, we produce less power than we did 14 years ago, and the gigantic coal-fired power stations of Medupi and Kusile stand as monuments to the hubris of centralisation. Instead of building a number of smaller power stations, based on standardised technologies and modules, the government decided to build some of the largest power plants the world has ever seen.

This was the equivalent of putting all your eggs in one basket: instead of easing our power constraints incrementally, the government placed all its hopes in fixing it in one fell swoop, by adding a lot of capacity with just two plants. Of course, if that step failed, as it did, it was going to leave us in a very sticky situation.

It is not surprising that the government chose the path of centralisation, because that reflects its fundamental approach to governance. It is why well over nine-tenths of our electricity is produced by a state-protected, state-owned utility – the giant Eskom monopoly.

Eskom is responsible for almost all of the generation in South Africa, as well as the transmission and the vast majority of distribution to end-consumers. So when it fails, as it is doing now, there is no Plan B, nothing to fall back on – we are completely dependent on a single entity that is beholden to a government crippled by ideology and corruption.

The country would be in a much different position today had Eskom opened up the electricity market to the private sector in a meaningful way, particularly in generation. We might have had a number of private companies vying to supply electricity into the national grid – companies who would know that failing to supply the agreed-upon amounts, at the right price and time, would have immediate repercussions for them.

Companies in such a system would have a very strong incentive to prevent outages, whereas, in the case of Eskom, outages have been common for over 14 years. Whatever consequences there might have been for Eskom, they clearly weren't significant enough for the utility to fix the problem.

There is another way in which centralisation has contributed to our predicament: it is the ANC's compulsion to embed party insiders in positions of power throughout the public sector and the private sector, a policy known as cadre deployment; as well as its drive to compel organisations to staff its ranks with employees on the basis of race and gender to achieve "transformation".

The degree of institutional dysfunction in South Africa appears to be proportional to the degree of cadre deployment and transformation, with the public sector the worst affected, the state-owned enterprises running a close second, and the private sector wounded but still on its feet.

Cadre deployment and transformation had a two-fold effect. They gave cover to the appointment of staff members not qualified to do the work; and they opened the floodgates for monumental corruption at the intersection of business and the state. State capture through cadre deployment is the ANC's official policy, and the crimes being investigated by the Zondo commission are a natural consequence of this policy.

For South Africa's power problems to be fixed, the government has to abandon its obsession with centralisation. It has to open up the energy market to private providers of electricity, competing with one another and state-owned power plants to provide reliable electricity at the lowest price.

And it also has to give up on cadre deployment and transformation, allowing organisations such as Eskom to manage their affairs in a way that allows them to fulfil their purpose – producing electricity reliably, at low cost - by appointing the people best able to do the job, independent of their demographic features.

This is why the Institute of Race Relations (IRR) has launched its #PowerToThePeople campaign, with a list of demands we intend to deliver to the Minister of Energy. 

John Endres is chief of staff at the Institute of Race Relations (IRR), a liberal think tank.

https://www.news24.com/fin24/opinion/opinion-what-14-years-of-load-shedding-taught-us-about-centralisation-20210129

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