Eskom could deal a significant blow to South Africa’s already sluggish economic growth prospects this year and potentially plunge the economy into a second recession in three years as the power utility has warned of a high risk of increased stages of load shedding in winter.
The struggling power utility yesterday said there was a great likelihood that it could implement Stage 8 load shedding this winter, if its interventions are not successful, as the demand for electricity increases due to the cold weather.
Presenting its latest Status of the System update and its winter outlook plan, Eskom said 2022 experienced the highest level of load shedding which reduced the third quarter real gross domestic product (GDP) growth by 2.1 percentage points and cost the economy R300 billion.
Eskom has already implemented more hours of load shedding since the beginning of this year than it did during the whole of 2022.
Eskom board chairperson Mpho Makwana said that going through the winter months would be difficult as the power system will be even more constrained, and called for a coordinated effort among all stakeholders.
Makwana reiterated the board’s support of Eskom management in their efforts to improve the performance and the life extension of the generation’s coal-based power stations to deal with the energy crisis.
“We fully comprehend the adverse impact that rotational load shedding has on South Africa’s already fragile economy and its people,” Makwana said.
“We are doing everything to mitigate the intensity of rotational load shedding including taking lessons from the rest of the world.”
Eskom’s rotational power cuts, which have been at a heightened Stage 6 load shedding this year, have had a devastating impact on the economy as businesses incur additional costs to keep the lights on with diesel generators expenditure, while those who cannot afford it have to reduce their trading hours.
Stage 8 load shedding will mean that Eskom will cut electricity supply for 16 hours in a period of 32 hours, up from 12 hours during Stage 6 load shedding in a bid to protect the national grid from collapse.
Investec chief economist Annabel Bishop yesterday maintained that this year’s economic growth would still average near 0.2% year-on-year.
However, Bishop said a sustained average of Stage 8 load shedding could plunge growth into another contraction following the 4.6% GDP decline during lockdowns related to the Covid-19 pandemic in 2020.
“Load shedding has been severe, escalating over the second quarter of 2023 and will detract from growth noticeably,” Bishop said.
“At an average for the full year of stage 5 gives us 0.2% GDP growth. At an average for the full year of stage 8 gives us -0.5% GDP growth.”
Eskom said the outlook showed that load shedding might be predominantly implemented at Stage 5 for the winter period with breakdowns or capacity unavailable due to unplanned maintenance at 15 000MW.
However, should breakdowns reach 16 500MW, load shedding might be implemented at Stage 6 and if unplanned outages average to 18 000MW, load shedding might be required every day and might be implemented up to Stage 8.
Eskom group executive for transmission Segomoco Scheppers, however, allayed fears of a possible national blackout as speculated across various media platforms.
Scheepers said there were a number of control measures that were aimed at protecting the power system from collapsing, including load shedding and a R30 billion budget for diesel this year.
He said in a best case scenario Eskom would implement load shedding ranging between Stage 3 and Stage 5 between now and August, moving between various scenarios in a day.
“Efforts are underway to return a number of units from outages to mitigate the worst case scenario of 18 000MW or above from materialising. Eskom will also keep planned maintenance at a maximum of 3 000MW during the winter period,” Scheepers said.
A national blackout - a total power grid failure - is described as a total or partial interruption or suspension of electrical power supply from the national, regional, municipal or private grid supplier resulting in widespread power outages.
Independent energy analyst Lungile Mashele concurred that winter would be bad as peak demand was forecast to be 34 000MW whilst available supply is only 25 000MW, a shortfall of 9 000MW.
Mashele said load shedding would take up to two years to sort out through a mix of reliability maintenance, new capacity, return to service of Koeberg and three units at Kusile power stations.
“Stage 8 is inevitable. We’ve already seen glimpses since February where load shedding exceeded what was officially announced. A combination of load shedding and load curtailment,” Mashele said.
“A blackout will not happen. Yes, if it did, it would be catastrophic. Eskom transmission maintenance is on track. The system operator has numerous tools to avoid a blackout, these are ancillary services, demand response, load curtailment and lastly load shedding.”
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