SCANDALS – ESKOM, SARS, KPMG, BELL POTTINGER, McKINSEY, GUPTA’s, RENEWABLES AND CLIMATE CHANGE

SCANDALS – ESKOM, SARS, KPMG, BELL POTTINGER, McKINSEY, GUPTA’s, RENEWABLES AND CLIMATE CHANGE

SCANDALS – ESKOM, SARS, KPMG, BELL POTTINGER, McKINSEY, GUPTA’s, RENEWABLES AND CLIMATE CHANGE

Overloaded by daily shenanigans it is difficult to keep a clear head in these times. The recent catastrophic hurricanes of Harvey, Irma and Maria are clear evidence of climate change. One only needs to look at the statistics of the number of hurricanes over the decades, to see that not only are they increasing in number but the ferocity is getting stronger and stronger.

Back in South Africa the storms, hurricanes, or tornados, swirling around Eskom, SARS, Transnet, and KPMG, are growing in force. All of the finger pointing seems to be missing the point, and it is absolutely correct that firms that have been enticed by ridiculously large fees, should be held to account. But who were the parties that commissioned them in the first place? SARS, government, and almost everything points directly back to No 1, his cronies and the Gupta family.

As the storms pass over, as with the hurricanes, the damage and havoc caused by all of the corruption, mismanagement and incompetence becomes increasingly evident. In the case of Eskom the extraordinary abuse of funds should put the criminals in jail, but almost certainly they are sitting at home on full pay, and will use expensive lawyers to delay and protract their time of reckoning. In the case of the Gupta’s, with their bank accounts closed, they will in all probability just leave the country laden with cash and never be held to account here.

In the case of large scale renewables, under REIPPPP round 4, having had a delay of some 2 years, the Minister of Energy has announced a maximum payment of R0,77 per kWh (for all types of technology). This is in reality tantamount to fraud, and will result in private sector firms pulling out, accompanied by a loss of investment and job creation. It is already happening, with some factories having closed their doors.

At the smaller end of renewables, the government having done nothing since end of 2012 have contracted a few manufacturers to build solar water heaters that are sitting in warehouses. The figure is estimated at some 60,000 units, but promised payments of many millions are now running nearly 3 months late. The financial stress to these businesses is huge, already one has closed their doors and gone to court for payment.

For the consumer that is heating water with electricity, the reality is that electricity prices are going to escalate at intolerable levels. Eskom is asking for 19% in 2018, which will translate into a 37% increase to municipalities, and in turn this will be passed on to the consumer.

While extortionate, the reality is that Eskom is facing a huge problem, and anyway it is looked at, the years of mismanagement is going to come back to cost the consumer or taxpayer. With lower electricity sales (back to 2006 levels) a mountain of debt at R500 billion within a couple of years, higher debt charges, combined with depreciation, Eskom will go into a massive loss unless they either increase their revenues, by raising prices, or they will have to be bailed out, (even more), by the government and the tax payer. It is truly a Catch 22.

And while the ‘Golden Goliath’ or ‘deranged dotard’ (Trump) continues to deny climate change, even Mugabe and Zuma raised it in their speeches to the UN summit.

But in SA large scale renewables are actually on the back burner, and it will be the consumer that takes the power into their own hands, by going renewable with solar water heaters, because it is much cheaper than using Eskom. In a few year’s time the same will be true of solar photo voltaic, with battery storage, again because it will be cheaper to generate and store one’s own electricity than buying from Eskom or municipal resellers.

Encouragingly for those people that want to help save the planet from carbons, the latest analysis (CSIR and Bloomberg) shows that by 2050 up to 90% of SA’s power can be renewable. Two significant factors support this theory, the advances in technology particularly in battery storage, and the reducing cost of such technologies.

For the homeowner, solar water heaters enjoy that cheap storage solution today, and for solar electric it is coming.

In the interim, the consumer in South Africa will continue to be battered by the daily news of never ending scandal and corruption. The damage caused will take many years to recover from, and in the same way as in the Caribbean, it will take extensive rebuilding.


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