Economy takes a beating as Eskom drives SA to the edge
Economy takes beating for outages
SOUTH Africans might have to wait for another three to five years before enjoying uninterrupted power supply, while the economy continues to take a beating from the expected regular interruptions at a cost of R300 billion since 2008, economists and experts suggested yesterday.
Dawie Roodt, a director and chief economist at the Efficient Group, said the power utility blackouts had set the country back as much as 10 percent for potential economic growth at a cost of R300bn.
South Africans have had to endure the past weekend with constant power disruptions as Eskom battled with power supply constraints due to unforeseen technical problems at some of its power stations.
Eskom said on Friday that it had no choice but to implement stage one of load shedding due to depleted water reserves at its peaking power stations which used water to generate electricity and depleted diesel reserves to fire up the open-cycle gas turbines.
As the electricity demand increased due to rainy weather at the weekend, Eskom had introduced stage two of load shedding by midday yesterday.
Stage one means that the power utility is running short of about 1 000 megawatts of electricity, while stage two requires cutting 2 000MW. Stages three and four would mean a cataclysmic system collapse.
Eskom also declared a power emergency with large industrial customers urging them to reduce their electricity usage by 10 percent yesterday afternoon. It also experienced an increase in load losses as a result of multiple tripping of generating units at the Majuba and Matimba power stations, losing a total of 1 700MW of generating power.
It also warned that load shedding for today and tomorrow would be medium to low.
Roodt said South Africa should prepare for a further downgrade from credit rating agencies. He said the impact of disruption (to) electricity supply happened before the actual lights went off. “By that time Eskom had already communicated with its big customers to switch off some of their machines. This stops the running of the economy.”
Anton Eberhard, a National Planning Commission member and professor at the University of Cape Town’s Graduate School of Business, said the country should expect frequent power cuts over the next three to five years.
“Eskom cannot add new generation capacity fast enough. Its new power stations, Medupi and Kusile are years late and the performances of its existing power stations are deteriorating,” he said.
Eberhard said the utility had 42 gigawatts ( GW) of installed generation capacity plus an additional 2GW available from imports and independent power producers.
Power demand over the weekend was less than 30GW and this meant it should have been easy for Eskom to meet the demand.
But Eberhard added that because the utility’s large number of power units, at more than 8GW, kept on breaking with at least 3.5GW out on maintenance, it would be impossible to keep the lights on.
“Eskom has diesel-fired open-cycle gas turbines to meet peak demand, but is evidently not running these now at full capacity as it has either diesel supply problems or finds the costs too high when it is already in severe financial difficulties,” Eberhard said.
Avhapfani Tshifularo, an executive director at the SA Petroleum Industry Association, said Eskom’s challenge was that it had increased its diesel off-take which had not been planned for.
Eberhard added that the disaster of a coal silo collapsing at the Majuba power station had exacerbated the crisis.
The system was thus on a knife-edge and any further technical problems meant that the country would have power cuts.