Eskom’s unbundling causes mixed reactions

The proposed split of Eskom into generation, transmission, and distribution, has been received with mixed reactions.

According to NUM (National Union of Mineworkers), the split will result in massive job losses and retrenchments in provinces like Mpumalanga.

The union believes that the model proposed will result in surge of electricity prices rendering them unaffordable to the poor.

The NUM stated that it is not against renewable energy however, it suggests that the Independent Power Producers (IPPs) must stand alone and compete with Eskom.

Meanwhile, senior industry analyst at Frost & Sullivan, Neeraj Sanjay Mense emphasized the benefits of the proposed business model.

“Privatization will be the catalyst needed to unlock Eskom’s true value potential,” Mense said.

Frost & Sullivan said that by retaining ownership of the transmission infrastructure, with the existing structure, Eskom is potentially losing out on efficiencies that can be attained from free market generation economics, as well as cost and energy efficiencies that private players would bring in.

Digitalization, customers as suppliers, microgrids, and demand side management are some of the aspects that one can expected Eskom to successfully attain once the privatization and unbundling take effect.

Source: ESI Africa