Business Leadership South Africa (BLSA) and Business Unity South Africa (Busa) have called on the South African government to urgently intervene to protect the national energy reform programme in the face of State-owned Eskom’s attempts to “undermine it”.

The organisations argue that Eskom should promptly withdraw all legal challenges against the five electricity trading licences granted by the National Energy Regulator of South Africa (Nersa).

They say Eskom's current strategy of litigation and obstruction is directly undermining South Africa's national goal of achieving energy security, adding that these actions create uncertainty and send a negative signal to investors, delay critical energy projects and may prolong the devastating economic and social impact of loadshedding.

Government’s stated policy position is the unbundling of Eskom, encouraging private sector investment in generation and transmission and creating a competitive market to help solve the energy crisis, they note, arguing that Eskom’s actions contradict this policy direction and seek to stall or undermine the reform process.

By legally challenging Nersa’s awarding of trading licences, Busa and BLSA posit, Eskom is actively working to protect its “historical monopoly at the direct expense of a stable national power supply”.

"Eskom cannot be both the primary cause of our energy crisis and the gatekeeper of its solution.

"South African businesses are failing, jobs are being lost and our economy is stagnating. We need more power on the grid, now. For Eskom to spend public money on litigation designed to frustrate the very reforms government is championing and block the investment that can help secure cheaper and more secure energy is illogical and completely untenable," says BLSA CEO Busi Mavuso.

The organisations argue that the economic upside of the reform process is clear.

To date, the Electricity Regulation Act (ERA) has led to investments of more than R30-billion in new renewable energy generation projects. These investments are expected to generate nearly 10 000 new job opportunities in generation and storage alone.

Introducing a competitive wholesale market is essential to unlock an additional 6 GW of new private solar PV and 3.5 GW of wind by 2030. This represents a further R132-billion in private investment and substantial job creation, the organisations note.

“Eskom’s actions seek to block this progress,” they express.

BLSA and Busa argue that the utility’s focus should be on expanding and modernising the national grid to accommodate a diverse range of energy sources, not on stifling innovation and competition through the courts.

They note that the future of South Africa's energy landscape is one of decentralised, mixed-generation capacity, where agile municipalities and efficient independent power producers contribute to a resilient and robust national grid.

"Our goal as a nation must be a reliable and affordable supply of electricity for every South African. This requires collaboration, not litigation," says Busa CEO Khulekani Mathe.

"We are calling on Eskom's board and executive management to align Eskom's mandate and actions with the reform direction as outlined in the President’s Energy Action Plan and the ERA.

“Introducing a vibrant and competitive market that encourages much-needed additional investment is critical for consumers to access affordable, clean power, which is key to longer term energy security and making South Africa globally competitive. Anti-competitive and discriminatory practices undermine the national agenda,” he adds.

BLSA and Busa urge Electricity and Energy Minister Dr Kgosientsho Ramokgopa to engage Eskom’s board and relevant government entities to secure an immediate cessation of all lawsuits and legal disputes initiated by Eskom against Nersa; a public commitment from Eskom to work collaboratively with all stakeholders to fast-track the integration of new generation capacity onto the national grid, in parallel with expanding the grid; and clear directives from the appropriate government authorities instructing Eskom to cease its anti-competitive and discriminatory behaviour and fully support the liberalisation of the energy sector.

“The era of a single, State-run monopoly controlling our country's economic destiny is over. To power our future, we must empower progress and encourage investment and job creation, not protect the past,” the organisations state in an August 7 media release.