Growth in power usage should boost KZN confidence

STATISTICS SA data has shown that the growth rate of electricity distribution or consumption doubled to 1 percent year-on-year in the first 11 months of last year compared with 0.5 percent in 2017.

That should bolster Kwazulu-natal (KZN) consumer and business confidence as the only time that electricity consumption growth was higher in recent years was in 2010 when the economy grew by 3 percent.

Cyril Ramaphosa’s election as ANC president in December 2017 and subsequent euphoria in financial markets were reflected in a 34-point surge in the FNB Bureau for Economic Research (BER) Consumer Confidence Index (CCI) to a record +26 in the first quarter of last year.

The previous largest jump in the CCI took place in the second quarter of 2004 when the CCI soared by 27 points from -7 to +20 after the announcement that South Africa would host the 2010 World Cup Soccer tournament.

The 2017 increase in electricity consumption followed two years of declining consumption as state-owned power utility Eskom was unable to meet demand and had to institute rotational load-shedding.

Rotational load-shedding normally means a suburb will lose up to two hours a day in a stage 1 situation when Eskom is short of 1 000MW or three hours a day in a stage 2 or 2 000MW shortfall event.

In 2015 national electricity consumption fell by 1.3 percent and in 2016 it dropped by 1 percent. This meant that the total annual consumption of 229 342 gigawatt-hours (GWH) in 2017 were less than the 2007 total of 241 170 GWH, even though the population and the economy grew by more than 10 percent during that period.

The 11 months of 2018 data also show that Eskom generation declined by 0.3 percent, so the increase in demand was met by generation provided by independent power producers (IPP).

The amount produced by IPPS has increased from only 884GWH in December 2007 to 2 060GWH in November last year, when it accounted for 9.7 percent of total generation.

Eskom instituted load shedding on an intermittent basis on November 29 last year after the connection with Mozambique broke down and it lost 700MW of power imports.

There was no load shedding over the festive season as many factories shut for the holiday, but Eskom has warned that it may implement load shedding from January 15 when the factories reopen.

The connection with Mozambique has now been restored and urgent maintenance on ageing power plants took place over December, so the dire warnings of load shedding will not be implemented.