Struggling Eskom extends record national power cuts to fourth day
• Absenteeism and intimidation of working employees still rife
Eskom will extend the worst blackouts on record to a fourth day as it struggles to recover from a strike that |prevented as many as 90% of staff at some power plants from going to work.
The power utility cut 6,000MW from the national grid from 2pm until midnight on Thursday and will do so again from 5am until midnight on Friday, it said in a statement on Twitter.
It started cutting that much power for the first time in more than two years on June 28.
Eskom has raised its wage offer to unions to 7%, according to people familiar with the information, an attempt to break a deadlock that led the utility to cut enough power to supply 4-million homes. Workers went on a rampage, torching homes of senior officials and blocking entry into plants.
The current load-shedding, as much as 36,000 gigawatt hours and counting during stage 6 power cuts, is the highest recorded, according to the Council for Scientific and Industrial Research.
The previous record was 30,000 gigawatt hours.
DISRUPTION
While public enterprises minister Pravin Gordhan said two days ago that staff will return to work from Wednesday, “high levels of absenteeism and intimidation of working employees in some of the power stations is still rife,” Eskom said.
“Due to the unlawful and unprotected strike, which has caused widespread disruption to Eskom’s power plants, Eskom is still unable to return some generators to service,” the company said.
The utility plans to cut a minimum of 4,000MW of power continuously over the weekend.
Unions are expected to meet managers on Friday about a pending wage agreement, according to the National Union of Mineworkers (NUM).
Meanwhile, the outages have caught rand bulls off guard, with at least three long-rand trades hitting stop-loss levels within a week as the rand tumbled to a 20-month low.
Societe Generale, Credit Agricole and HSBC recommended short-dollar positions versus the rand last week, citing supportive factors such as the central bank’s hawkish stance, relatively low inflation and an expected recovery in China’s economy that would boost demand for SA’s rawmaterial exports. But load-shedding imposed by Eskom put paid to that as investors fret about the effect on an economy already strained by the pandemic, catastrophic floods in KwaZulu-Natal and destructive protests.
The rand is down 3.8% this week, the worst performer among 23 major emergingmarket currencies tracked by Bloomberg. The SA currency has been hard-hit by the Eskom news, though the country’s electricity crisis is nothing new, said Cristian Maggio, the Londonbased head of portfolio strategy at TD Securities.
“SA has been dealing with power shortages for years,” Maggio said. “Only the market seems to have forgotten because of Covid, and other priorities that crept to the forefront.”
Credit Agricole recommended going short on the dollar versus the rand on June 21, entering the trade at R15.9456 per dollar, with a stop-loss at R16.2684.
It was stopped out of the trade on Wednesday when the rand weakened to 16.2965, taking a loss of 1.9%, according to Sebastien Barbe, head of emerging-market research at the lender.
SocGen entered a similar trade, also on June 21, with a stop loss at 16.35, while HSBC opened a short-dollar-rand trade idea on June 24 at 15.92, with a stop at 16.30. Both stops were breached on Thursday when the rand slumped to 16.4736, the weakest level since October 2020.