THE moral duty of patriotic South Africans is to maximise energy consumption. Energy "saving" and "efficiency" are nothing of the kind. They are wasteful and inefficient and encourage the government to continue causing the electricity catastrophe by not implementing its 15-year-old proconsumer and antimonopoly policy. Cutting electricity consumption is like taking painkillers instead of curing disease. Consumer co-operation concealed the severity of the original power crisis, which prolonged it and turned a crisis into a catastrophe.
Direct cost overruns on the construction of Medupi, just one of two power stations — assuming the upper estimate of a cost to the economy of unsold energy of R75/kWh in terms of the Integrated Resource Plan — result in an extra R1.4-trillion for the extra six months. That is the equivalent of R2.8-trillion a year, which is nearly as much as the entire gross domestic product. This is the equivalent of one RDP house per citizen, or the cost of all schooling for eight years. If we assume the same for the second power station, Kusile, the cost amounts to twice the GDP.
Substantially improved living standards are possible without much more electricity and at much lower prices than Eskom wants.
When India, Ghana, Nigeria and others had similar catastrophes, their governments successfully implemented the kind of antimonopoly policy we adopted 15 years ago but never implemented.
Our government will, like others, stop causing the catastrophe if citizens stop concealing it by saving electricity. Maximum blackouts entail short-term pain for long-term gain.
Eskom’s cavalier announcements last week about additional delays and increased costs cite numbers too big to comprehend. The accompanying rhetoric conceals more than it reveals. Saying that the predicted completion date for Medupi has been extended beyond the end of this year conceals previous delays, which amount to years, not months. That the new completion date is the "second half" of next year conceals whether it will be closer to midyear or the end of the year. Saying "may" be completed conceals when it will be completed. Focusing on the completion date for one unit conceals completion dates for the other five. Highlighting when construction will be completed conceals the potentially long commissioning process that precedes power generation. Emphasising some cost escalations conceals others, such as extra interest during prolonged construction. Consigning losses to Eskom’s revenue conceals losses endured by consumers. Concentrating on Medupi conceals Kusile’s delays and costs.
Disruption endured by all South Africans is concealed by the fact that it is never quantified.
Even estimates based on positive assumptions are terrifying. If the real cost of unsold electricity is much lower than the government’s upper estimate of R75/kWh, the catastrophe remains, by far, our biggest disaster.
As the real delay is closer to five years than six months, real costs could exceed R10-trillion — three times the GDP. Had the government’s antimonopoly policy been implemented, we could have been one of the world’s richest countries by 2030. During the initial crisis, expert Brian Statham said calculating its effect was pointless because the numbers were too big to comprehend. They have since exploded.
Public Enterprises Minister Malusi Gigaba’s promise was that heads would roll if Medupi did not generate power this year. Whose heads? Critics bay for Eskom blood but the real culprits are so powerful and plentiful that only incredulous eyes will roll.
Blame rests with all politicians and officials who did not implement their policy, starting with former public enterprises minister Alec Erwin. Being a communist, he loathes and did not implement the antimonopoly policy.
Patriotic citizens have a simple choice: enough self-inflicted deprivation to conceal and perpetuate the catastrophe, or maximal consumption to expose it and force the immediate termination of Eskom’s failed monopoly.
• Louw is executive director of the Free Market Foundation.