Open public debate. Should Eskom be restructured, and if so how and when?

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Della Griffin
5 years ago
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1 Open public debate Should Eskom be restructured, and if so how and when?

2 Organised and hosted by Sponsored and co-hosted by

3 Purpose of the debate To debate the wide a range of options for restructuring of Eskom. To listen, discuss and participate openly on a key issue facing SA. To air the issues through open discussion and debate of all sides. To enable attendees to make up their own minds on the subject. Constructive engagement not an opportunity to attack Eskom. Presenters speak in their personal capacities. Presenters do not necessarily agree with the generic motions. Intellectual stimulation, learning and entertainment.

4 Motion 1: No restructuring Although needing renewed financial, operational and maintenance discipline, and the rooting out of maladministration and corruption, the current Eskom structure as a vertically integrated SOE is suitable and appropriate for the socioeconomic and developmental needs of South Africa.

5 Motion 2: Light restructuring While maintaining the current structure as a vertically integrated utility, increased public participation in the business of Eskom through additional public and/or strategic equity partners is needed to recapitalise the business and introduce enhanced accountability and transparency.

6 Motion 3: Deep restructuring The business model of Eskom, and indeed the whole electricity supply industry in South Africa needs to be fundamentally restructured to make it fit-for-purpose to face the challenges of future electricity supply and disruptive technologies, generally along the lines proposed in the Government White Paper on Energy Policy of 1998.

7 Summary of motions Motion 1: No restructuring Status quo - retain vertically integrated monopoly Motion 2: Shallow restructuring Status quo + increased public participation Motion 3: Deep restructuring Both Eskom and the Electricity Supply Industry

8 Introduction: Chris Forlee Chris Forlee is the CEO and full-time regulator member of the National Energy Regulator of South Africa (NERSA).

9 Introduction: Frans Baleni Frans Baleni is deputy chairman of the Development Bank of Southern Africa, and former secretary-general at the National Union of Mineworkers (NUM).

10 Introduction: Nelisiwe Magubane Nelisiwe Magubane is a nonexecutive director of Eskom and former director-general at the Department of Energy.

11 Introduction: Dr. Grové Steyn Dr. Grové Steyn is a leading infrastructure and regulatory economist, and a director at Meridian Economics.

12 Motion 1: No restructuring Presentation by: Mr. Frans Baleni

21 Motion 2: Light restructuring Presentation by: Ms. Nelisiwe Magubane

22 Introduction Disclaimer!

23 Background Address energy poverty Diversification of ownership Affordability Government objectives Governance of the energy sector Sustainability

24 International experience for restructuring objectives Brazil: Economic meltdown Colombia: Diversification of energy supply and deregulation Objectives Argentina: Inefficient vertical integrated companies Finland: Improved efficiency Chile: Private sector participation

25 What needs to be done? Begin with the end in mind What is the most appropriate model for South Africa to meet the stated objectives? What are the priorities for socio economic success? What is the role of the electricity sector that will ensure that socio economic success as outlined in our long term plans materialises? Where are we? How do we get the end state?

26 A transformed electricity sector that meets socio economic objectives of South Africa Public participation Transformed electricity sector Vertically integrated, fiscally challenged, vulnerable Eskom and Municipalities: efficiencies Energy sector evolution Participation & innovation Enabling environment Skills Drive Financial astuteness Inequalities Economic equity affordability Just energy transition for South Africa Collaboration and legislative environment

27 Begin with the end in mind Constitutional and legislative clarity Industry structure and market review/ unbundling Redesigned policy framework Appropriate financial structure Sustainability

28 What are the key issues to be addressed? Eskom and municipal collaboration Efficiencies in the distribution sector Smart grids/cities Capital structure of the utilities Loan covenants Legislative impediments and how should they be addressed Constitutional mandates of various spheres of government Concurrent functions Impact on various communities Coal transportation Resource based towns Diversification of energy mix Local electricity plans Integrated Resource Plan

29 Conclusion Just energy transition Constructive discussions Develop Comprehensive action plan End state

30 Motion 3: Deep restructuring Presentation by: Dr. Grové Steyn

48 House rules for open discussion State your name and affiliation before your question or comment. Questions, comments and responses must be short and focused. Only one question or comment per person from the floor. No grandstanding from persons in the audience. The chairman may cut longwinded questions, comments or responses. Keep discussions cordial and professional. No personal, ad hominem or organisational attacks allowed. The chairman s rulings are final.

49 Open discussion

50 Motion 1: No restructuring Summary and wrap-up by: Mr. Frans Baleni

52 Motion 2: Light restructuring Summary and wrap-up by: Ms. Nelisiwe Magubane

53 Summary / Wrap-up Is the end state going to meet the needs of Industrial 4.0 ICT infrastructure Smart cities Electro-mobility Just energy transition Constructive discussions Develop Comprehensive action plan End state

54 Motion 3: Deep restructuring Summary and wrap-up: Dr. Grové Steyn

57 Summary of motions and vote Motion 1: Status quo: Retain a vertically integrated monopoly Motion 2: Shallow restructuring: Status quo + increased public participation Motion 3: Deep restructuring: Both Eskom and the Electricity Supply Industry

58 Outcome of vote Motion 1: Status quo: 14% of the audience voted in favour of Motion 1 Motion 2: Shallow restructuring: 16% of the audience voted in favour of Motion 2 Motion 3: Deep restructuring: 70% of the audience voted in favour of Motion 3

59 Organised and hosted by Sponsored and co-hosted by

60 Some words on the debate Thanks and closure Invitation to cocktail party

IN FOCUS. MATERIAL ISSUES continued ISSUES. Engaging with stakeholders for mutual benefit and building trust

IN FOCUS. MATERIAL ISSUES continued ISSUES. Engaging with stakeholders for mutual benefit and building trust Engagement is an opportunity for us to listen to our stakeholders, and to initiate proactive and meaningful dialogue that captures the voices of all concerned. We continuously seek to be inclusive and