This column was first published in Business Day
The load-shedding shock has apparently not been big enough to cause any action.
The economy hasn’t fallen off a cliff in the first quarter and we have seen inherent robustness of the private sector. There appears to have been limited impact on party polling.
So, no problem?
The problem is this robustness breeds complacency (paralleling complacency on the unemployment and inequality crises) among policymakers. Yet it is worse than that. Energy experts have fully laid out in public in the past month the lack of wider energy policy coherence yet no action has been taken.
Analysts, investors and many parts of the media mistakenly think we are dealing with a simple government policy-formation, deployment and implementation machine.
Instead of productive panic, complacency is mixed with internal political factional battles, a blurring of party and state, rent-extraction elements clinging on, ideological lead weights, egos and personality clashes, micro-fiddling, a deep fatigue and a strange “Eskom cognitive dissonance syndrome”. This is a toxic mix in which policy and optimal strategies are far down the pecking order.
This goes beyond the need for polite discussions with alliance partners. It is important to unpack this mix because the lazy consensus is to assume that after the elections the deep threat of the financial and operational challenges at Eskom will suddenly unblock and problems at the utility will magically be solved.
There are some simple and obvious ways to fix the problems.
An enormous amount of political capital should be deployed through effective leadership to unblock channels, riding over ideological bonds and breaking with cognitive dissonance.
Eskom should be moved from reporting to the department of public enterprise to reporting directly to the Treasury. The idea of having a chief restructuring officer is a halfway house to this endpoint.
The National Economic Development and Labour Council (Nedlac) process for consultation over integrated resource planning (IRP) should be cancelled and a new least-cost version audited by the Council for Scientific and Industrial Research (CSIR) should be approved by the cabinet with emergency procurement of unlimited renewables (taking as much as possible at a set price of say 60c/kWh) within two months.
The key thing after the elections is leadership on Eskom, and energy policy that is credible and comprehensive, derisking of Eskom with international development finance institution funding of the just jobs transition, and a credible least-cost IRP that reduces electricity bills while stimulating growth.
It seems unlikely it will happen.
The financial need to achieve going concern will be so pressing in the six weeks after the election that everything else will be thrown out of the window. Eskom must have a new bailout 2.0 by the time it publishes its 2018-19 results towards end-June to achieve going concern, which due to the National Energy Regulator of SA (Nersa) tariff award it will not have at this rate. Add to that the recent evidence of liquidity problems at end-March.