Outages crippling SA economy and mines

BUSINESSES RESORTING TO GAS

WITH power outages now a daily reality in South Africa and expected to last for the next three years, business and individuals are taking matters into their own hands.

In its worst electricity crisis since 2008 Eskom is implementing rolling blackouts as its old creaking grid struggles to meet growing demand.

Cellphone giant MTN and Standard Bank are among the companies that have decided to go it alone in trying to keep the lights burning at their businesses.

Households are also seeking to become self-reliant on power supply in a country that has barely raised installed capacity since apartheid ended two decades ago, despite millions of households joining the grid.

Eskom has admitted to ignoring proper maintenance on its grid over the years, and the network cannot reliably supply the 42 000 megawatts (MW) required to keep the economy ticking.

The central bank has already shaved off at least 3 basis points on its 2015 growth forecast to 2.2%.

MTN has installed a 2MW power plant at its Johannesburg headquarters to reduce its reliance on Eskom. As a bonus, by generating electricity, the firm has slashed power bills at those offices by one third.

“If you have the recipe for producing cheaper power, why would you not do it because it’s going to save you,” said Willem Webber, MTN’s energy plan’s implementation manager.

The initiative has been so successful that MTN plans to increase output to 24MW within three years, he said. To generate electricity using its gas plant, MTN spends 0.87 cents per kilowatt hour against the R1.50-R1.40/kWh it pays Eskom.

Standard Bank has also installed a gas plant generating 1MW at a cost of R40-million to provide 17% of the 6MW required at one of the lender’s offices in a Johannesburg suburb, or enough to power about 2 500 homes. Both firms are burning natural gas to produce electricity.

The mining industry, SA’s leading foreign exchange earner, is also hurting as Eskom asks firms to reduce consumption by 10% to 20% during controlled outages.

Households are also seeking alternatives to Eskom’s erratic supply, said Inus Dreckmeyr, managing director at engineering consultancy Netshield SA, which advises on wind and solar solutions.

Last week alone, the firm had 90 applications from households looking for alternative means of electricity supply.