ESCOM Outlines Future Plans for Renewable Energy and Artificial Intelligence Integration

We want to quickly go through the other two companies. So that's transmission. Yes, so the priority, really the priority is the transmission. Because this is the one that's going to be enabling all of the other participants. Absolutely, this power is already coming in? Yes, yes. And then after that, it will be distribution. Let's talk about distribution very quickly. Structure and what kind of work it's going to be doing. Distribution, they are now going to be starting their own process of getting NASA to give them the license to operate. Okay, we don't need. Independent, no. You remember. Target, timelines. It's probably going to be before the end of this financial year where they will have them now getting that license from NASA to operate. Then once all of that has been done, you now go to the funders to give you the consent that it can be separated, right? And then once we get all of that done, towards now the end of next year, we can start to have a distribution company that is a standalone. I'm going to ask a question of the future. Do we have an idea of what kind of structure it will have? I.e., are we here talking about still a company that's 100% government-owned? Or are we talking here about a company that's a hybrid or whatever model you come to? Do we know? We know for sure. Already from the get-go, we know. All of these are going to be 100% owned by the government. There is no privatization, but there's going to be private participation, which is different from, for example, as we build the lines, if we do not have money, just like you would say, okay, for a particular toll road, can I have a company that can build this particular toll road over the next 20 years? That company will run that toll road. At the end of the 20 years, you hand over the road to government from ownership. So build, operate, and transfer. That's possibly some of the ways that we're going to be using to build the transmission network. We speak, of course, ahead of elections. That may well change the political landscape, and who knows what kind of political meddling thinking may come into play and perhaps structure how these companies are going to look like. Let's come to generation, which is, of course, our present ESCOM, as we know it. I just wanted to understand, in terms of what we want this ESCOM of the future to look like, what is your vision? Yeah, generation, there was a feeling that generation must just run the current coal power stations until they get to the end of life. Into the future, and then it goes away into nothingness. That is not what we want. That is clearly not what the board is setting out to do. We want a generation that is an active player. Of course, it needs to compete with all of the other players that are out there. But today, there is no other company in South Africa that have got the kind of expertise in this space than ESCOM. Nobody, right? So we need to make sure that we liberate that advantage that we have. We have this capability, we've got the skills within that company. But as we move forward, we will be participating, generationally participating in renewable energies. Think about participating in gas, participating in solar PV, participating in hydro, and also participating in wind. So that is what you are going to be seeing us doing. For example, the current IRP is saying that we expect our allocation for gas, for ESCOM, in the next few years should be three megawatts. We believe that our participation should be close to 6,000 megawatts. Okay, okay. When it comes to solar PV, I think the current allocation is about 1.5. We see ourselves actually going all the way to 7.2 gigawatts within that space. So we are going to be active players within the renewables. I was just quickly looking at a story that came through today from the Saudi Aramco, you know it's Aramco, the Saudi oil company, and the CEO was being interviewed. And he says, I mean, it's a startling headline. He says, the energy transition is failing. And he says the world should abandon the fantasy of phasing out oil. And I take that in relation to coal. Would you use as strong words as those in relation to coal? He is emphasizing more the need to improve the efficiencies around these fossil fuels, as opposed to a complete phase out. For us, I mean, think about Maidubi. Look, think about Kusira. We've just finished building this plant. There's got another 50 years. So we will run these things up until the end of their lives. We are not going to be abandoning coal anytime soon when it comes to those. But when it comes to the reach, the end of the life of the different power stations, we will be switching off and moving into renewables. You still need a clear baseload. And that baseload, in our view, it will come largely from coal and also from nuclear. And our view of nuclear is that we will be looking at these mini power stations around nuclear that we would like to build. OK. I want to ask you a difficult question. And this is your vision of an ESCOM of the future in terms of the sources of power that it will have as it transitions. I don't know if you've got that mapped out, i.e. what percentage is going to be coming from coal? What percentage is going to be coming from nuclear? What percentage is going to be coming from gas and the other renewables? It's very difficult because it depends on a point in time. If you're asking me at 2030... I was hoping you would outline it for me up to 2045. At 2030, we'll be at a particular point. At 2035, 2050, we'll be at a particular point. But you will be seeing a phasing down of coal. All of this, the phasing down of coal and upping, of course, nuclear together with renewables. That's what you will see. OK. So let's circle back to the issue of AI, artificial intelligence. We have seen the world consumed by this over the past two years. My sense, and we speak a lot about this in the newsroom, is that we are seeing a situation where the world economy is transforming, at least the developed countries. And as developing countries, we are following, but we're not even sure what we are following in relation to this. From an ESCOM perspective, how are you approaching AI? Look, AI is still at the early stages right now. There are so many... There's excitement about gen AI right across. They are looking at different use cases, because we can apply it across. And even things like helping us deal with the customer service. With all of these challenges, everybody's phoning ESCOM. You need to find a way to get human beings to be assisted in delivering great customer experience. And gen AI is a great example of how to manage that. So that's one thing. Other use cases, looking at just managing our maintenance, predicting when things we should be doing what. And that is the exploration that is being done by the teams there. Just looking at also using, not just gen AI, but using things like drones to make sure that we take care and provide the necessary security for the shipment of coal, to avoid people bringing in capacity of coal or mixing it with rocks and things like that. So use of technology is going to be critical as we think about the future. That's why within our own board, one of the priorities that we have given for ourselves is that whoever is going to be replacing Mpo who left, that person has got to be bringing in the IT and digital skills to this board. That's how critical this is. Are you investing enough money in it? Do you have enough money to invest in it? Do you need help to get enough money into it? No, no, we don't. I mean, we have a very good budget with regards to technology within ESCOM. It's just a matter of the people that we have, they need to be applying their minds on how best we can use the technology that is emerging right now. Before you go, I've got to ask you, do you think ESCOM will be profitable during your term? My term ends in two years' time. I think it will take more than two years to get to a point where we are going to be profitable. But already by the time that I leave, definitely you will be seeing the direction that we are moving, we'll be reducing our losses. Yeah, I was actually hoping you would be able to sort of share with us that sort of pathway in terms of that reduce, what the reduction, the losses and the improving profitability. For example, this current financial year that we're ending in here is probably the same losses that we have made last year. Yeah. Right? That's where we'll probably end. And that will be the last time that we have this kind of losses. Is that going to be peak loss time? Peak loss, and then you'll be moving down. You know, why? Things like, because as you reduce your load shedding, you are reducing the amount of diesel that you are going to be buying, spending close to 30 billion rand on diesel. You know, we like to cut it down to around about 10, you know. So that gives you another 20 billion that you can put back into the bottom line. Sure. So that is the kind of thing that you're going to, so reducing of that. And yeah, as we move forward, and again, because we're going to have lower load shedding, you will end up having your sales figures going up, your revenue up, then it will also help with the bottom line as well. And then the last driver is because now our debt is no longer as bad as it used to be, our interest charge is going to be lower. So a combination of those three things, those are the things that are going to be helping us to get back to profitability. Very quickly, last question, sketch winter for us. This winter? This winter. This winter is probably one of the best winters that we're going to be having. It will be better than last year. Last year, on average, you know, we said we don't want to get, you know, above stage four load shedding. And I don't want to make a pre-announcement because the management team will be sharing a winter plan with the nation. And I would like to respect them to do that. But all I can say is that this winter is going to be better than last year. Yeah, you heard that here the first time. That's Tetanyati, the chairman of ESCOM.

CNBC Africa’s Godfrey Mutizwa spoke to the Eskom Chairman, Mteto Nyati about implementing a future where Artificial intelligence and renewable energies are the norm. 

Nyati: Eskom to participate in renewables & green energy

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Nyati: Eskom to participate in renewables & green energy

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