Decorporatise Eskom for public-utility transformation and a Just Transition

SAFTU and the whole society need to change the prevailing power relations, starting with electricity supply. Today, President Cyril Ramaphosa is being thanked by many – especially in big business – for over-ruling the Energy Minister, Gwede Mantashe, and opening up new generation capacity. There is such hope that especially by using renewable energy, the world can avoid climate catastrophe.

On the one hand, we are desperate to end load-shedding, as well as the “load-reduction” aimed at punishing poor and working-class residents of townships and impoverished dorpies who cannot pay their Eskom bills and sometimes resort to illegal connections. These power cuts are unacceptable.

And we know the middle classes are as desperate as workers for some relief from the depressing winter-time chill, especially during an unprecedented health pandemic. And although they do not typically resort to indoor coal, paraffin, or wood as alternatives to having their electric power cut constantly, the middle-class misery is also real.

So, we salute women especially, who in their social reproduction of our households somehow carry these burdens of cooking, heating and childcare using scarce or dirty energy, displaying with their increased sacrifice such love for their family, and such justified hatred of Eskom.

On the other hand, we despair that the ‘solution’ chosen will continue to fail the masses, since it reflects neoliberal principles of state shrinkage and for-profit energy supply, which has been disastrous in so many other countries.

We also worry that the upper-middle classes and rich are trying their familiar old class-apartheid tricks that they so readily apply to transport, healthcare, education, home security and anything else they can privatise or buy themselves out of, so as to avoid coming into contact with our working masses. In the case of energy, we see the wealthy insulating themselves from load-shedding with home-based generators and invertors, and even rooftop solar systems costing more than R150 000 per house.

What they are doing is selfish: undermining both municipal and Eskom revenues, which in turn deepens the fiscal crisis, preventing these public suppliers from cross-subsidisation to make electricity and other municipal services affordable, or even available, to the masses. That’s why SAFTU insists that socially-owned renewables, with community control and worker self-management, are absolutely vital as elements of a transformed national grid, one that can draw on sun and wind where they are strongest at any given time, and arrange major storage facilities for overcast days and windless periods, such as pumped hydropower and molten salt.

The selfish, individualised strategies are no substitute for a well-planned national system based ultimately on low-polluting renewable energy. Nor is breaking Eskom into generation, transmission, and distribution components sensible, given our national grid’s need for coherence, not to mention the way privatisations and corporatisations have so often failed in a country with such corrupt corporate and ruling-party skellums.

No trust in the state and capital

And while we hope for any improvement in this degraded energy system, we don’t trust this government or big capital. We know that when Ramaphosa was put in charge of the Eskom War Room once he became Deputy President in 2014 – while still owning coal mines through the Shanduka empire, including the notorious Optimum, whose divestment came much later – he failed miserably.

Since 2006 when Koeberg nuclear power station had to be taken offline due to a ‘loose bolt’, creating a long Western Cape black-out and costing the ANC control over the City of Cape Town in that year’s municipal elections, the public utility has become ungovernable. Its response to persistent electricity shortages was to ignore them until in 2007 its managers and leading politicians decided to commission the two largest coal-fired power plants being built anywhere on earth: Medupi and Kusile.

Among other coal-fired power plant problems, it was the flaws in these two monsters – commissioned at R60 billion each but now many years behind schedule and still incomplete at R200 billion each – that led to this week’s Stage 4 outages. At the time, in the late 2000s when economic growth was much higher, that decision to build Medupi and Kusile revealed to many of us, the depth of corruption by leadership in Eskom (chaired by Valli Moosa who an ANC Finance Committee member was also operating in conflict of interest), various oversight ministries – Public Enterprises (Alec Erwin), Energy (Dipuo Peters) and Finance (Pravin Gordhan) – and the Presidency (Thabo Mbeki).

If Jacob Zuma should “Pay Back the Money!” so that accountability is demanded for all his corruption, so too should Moosa, Erwin, Peters, Gordhan and Mbeki, for the 2007 deals their party’s investment wing Chancellor House made with Tokyo-based Hitachi, whose boilers costing tens of billions of rands failed yet again this week. The Chancellor House sleaze was prosecuted in the U.S. under the Foreign Corrupt Practices Act, leading Hitachi to pay a $19 million (R260 million) fine in 2015. But the beneficiary was the U.S. government – while here, that company remains in place serving Eskom incompetently, as we remain in the dark.

Renewables done wrong

Did matters change today, now that up to 100MW of privatised electricity generation can be built by wealthy corporates? We would celebrate, were Ramaphosa truly shifting South Africa away from contributing even more to the climate crisis by replacing Eskom’s unreliable coal and nuclear generating fleet – as well as even-more methane-emitting gas power plants – with renewable energy, and at the same time repairing Eskom.

But trade unionists and all our communities have become cynical. Indeed, we disagree with Ramaphosa’s statement, in which the new strategy will be to rely on for-profit corporates, even if the energy is renewable, and even if we are relieved that this is a huge step up from the tokenistic 1MW that Mantashe was allowing before making a 10MW concession.

Mantashe has shown a surreal hostility to renewable energy supplied in larger increments, which is why we feel the ANC Integrity Commission and Green Scorpions – as well as the Zondo Commission – are correct in their suspicions and investigations of Mantashe, for bizarre deals involving the likes of high-pollution Karpowership offshore gas generators or his Bosasa-gifted home security systems.

A socialist alternative awaits debate

But Ramaphosa must be presented with an alternative to his privatised power plan, and as socialists we insist that the basic strategy should instead be: decorporatising Eskom and replacing the junkies there addicted to coal, gas and nuclear energy generation – all of which appear rife with corruption – with serious labour, social and environmental activists.

We want a Green New Eskom, and to that end, in 2019 we joined the Climate Justice Coalition of leading civil society, grassroots, trade union and community-based organisations to develop the case. We hope the whole society now considers and endorses Coalition demands to transform Eskom and the country’s energy system:

1. A rapid and just transition to a more socially owned, renewable energy powered economy, providing clean, safe, and affordable energy for all, with no worker or community left behind in the transition.
2. Put in place a robust just transition plan that invests in and protects workers and communities vulnerable in the transition to a zero-carbon future. We cannot leave workers and communities behind in this transition. They must be protected.
3. Remove the constraints on renewable energy put in place by the 2019 Integrated Resources Plan and instead transition as fast as possible to renewable energy. We must accelerate the transition in line with South Africa’s fair share of keeping warming to 1.5°C.
4. Policies and incentives to enable socially-owned renewable energy so workers, communities, small-to-medium businesses, and families can own and benefit from clean energy. Gender, racial, and economic justice must guide these policies.
5. The development and implementation of green industrialisation policies, which enables South Africa to proudly produce renewable energy and associated components. Priority should also be given to vulnerable, coal-dependent, carbon-intensive regions.
6. Expand Eskom’s mandate to allow it to rapidly build renewable energy and energy storage. They must also make the investments needed to extend and upgrade the grid – allowing socially owned renewable energy to feed into the grid.
7. Ending harmful and regressive subsidies for coal, oil, and fossil gas, and redirecting them to urgent needs like education, healthcare, energy access, and renewable energy. The taxpayer cannot keep bailing out polluting and uneconomic industries.
8. No new coal power – so-called “clean coal” is an expensive polluting lie. Just as Medupi and Kusile power stations are projected to cost nearly R500 billion, and that’s without technologies to clean them up, which Eskom has said are simply too expensive.
9. No to fracking for fossil gas. Rather than polluting fossil gas, new gas plants should aim for renewable hydrogen and biogas, which can help balance the grid for renewables. South Africa and Sasol should become leaders in producing green hydrogen.
10. A mass rollout of solar panels; electric vehicles and accompanying infrastructure; affordable, electrified mass transit; smart grids; battery and storage technologies; and building efficiency retrofits especially for low-income houses; all with policies to encourage local production.
11. A massive skills, jobs, and training programme to create opportunities for the people of South Africa in the renewable energy economy and unlock One Million Climate Jobs. Women and youth empowerment must be a vital part of this program.
12. No to continued tariff hikes which are making electricity unaffordable and subsidizing corrupt and overpriced coal contracts. While Eskom does need to be able to cover its costs, South Africans should not be made to pay for the corruption and looting at Eskom.
13. Restructuring Eskom to do away with corruption and bloated, overpaid (mis)management. Eskom needs to put in place more transparent and accountable structures to ensure better public oversight, so that looting and corruption ends.
14. An audit of all energy supply contracts to recover costs on and end overpriced contracts – including the R14 trillion in overpriced coal contracts signed during 2008 load shedding. We must also declare as “Odious Debt” the corruption-riddled 2010 $3.75 billion loan the World Bank made for Medupi, and similar others by the China Development Bank, BRICS New Development, African Development Bank, and other western lenders, since they were all aware of the Hitachi-ANC deals.
15. Expand the insufficient basic free electricity access grant for low-income households and ensure all have access to sufficient reliable, affordable energy. We must protect, not disconnect and load shed, our most vulnerable citizens.
16. No exemptions to Eskom or Sasol for clean air regulations, minimum emission standards, or transparency on emissions data. We must strengthen regulations to ensure clean air for all, as argued in the Deadly Air or Umoya Obulalayo Case.
17. All communities impacted by mining and energy projects must have their free, prior, and informed consent respected by government and corporations. A standard which must be enshrined in the law and respected in practice.
18. Beyond just energy, as the Cry of the Xcluded and the Climate Justice Coalition have both demanded, South Africa needs a radical Green New Deal which puts South Africans to work building a more socially and ecologically just future, tackling our deep inequality, unemployment, and poverty.

These accompany SAFTU’s demands to the Presidential Climate Change Commission a few weeks ago, namely that a genuine Just Transition will require nationalisation (without compensation) of fossil fuel and other high-emissions facilities, in order to make the emissions cuts required. Instead of a corporatized model of ownership, as exists with the likes of Eskom, Transnet, and other State Owned Enterprises under neoliberal-capitalist rule, these should be considered as public utilities aimed at maximising the public good, especially the interests of poor and working-class people. That will entail not only hard work on closing the fossil-fuel facilities, but also in repurposing them for proper Just Transition activities.

These are not impossible demands; they are no more arduous than defeating apartheid in 1994, or gaining freely-supplied, locally and generically-manufactured AIDS medicines in 2004, or, more recently, winning free tertiary education for working-class students. All required intense protest, supported by the trade union movement. It is no surprise, that at MegaWatt Park there are back-to-back demonstrations this week by Soweto residents and Eskom workers, all angry at the corporatised, neoliberal approach adopted by Eskom CEO Andre de Ruyters.

Today, the society is on notice that nearly everything that Eskom’s de Ruyters, President Ramaphosa, Minister Mantashe and the ruling class does to address energy, first helps big business while spiking up the price of power paid by poor and working-class people, and letting rich people find their own escape route.

And that is simply unacceptable in what is the world’s most unequal country, one with such strong traditions of poor and working-class people finding unity with the middle class to defeat the rich and powerful. And that is what lies ahead now that the corporatised Eskom is obviously in its death throes. Our unity will be forged in the search for a Green New Eskom, with the most red social justice objectives, as workers assert class interest and counter power.