HomeNewsEskom load shedding is dooming South Africa’s economy, says economist

Eskom load shedding is dooming South Africa’s economy, says economist

ElectricityEskom’s rolling blackouts are leaving South Africans without power for hours at a time, but it is South Africa’s economy that is suffering the greatest blow, says Economist Mike Schussler.

“The current round of load shedding is going to have a dire effect on the South African economy,” he explains, warning that the mining industry will be one of the hardest hit – with no end in sight for the moment.

The extent of the effects of load shedding

“This will particularly hit heavy industry and small businesses very hard because they are asking every business to cut back on their power consumption which again will be reflected in the manufacturing output and in other aspects so I think right now this comes at the worst time for us, just as we were gathering pace for a recovery,” Schussler said.

The impact will affect every area of South African’s lives, even on the road while commuting through traffic. “The South African economy has taken many hits this year, load shedding for another week is going to affect most industries in the country, and people from offices to heavy industries are going to have huge problems. This is certainly not what we wanted to have and it’s certainly going to lower quota growth. Things like traffic jams are going to be worse this week.”

In Gauteng, productivity is already being severely affected by the power cuts over the last week, with many businesses having to close for hours at a time. Load shedding is expected to continue into the weekend and perhaps even into next week. The national power crisis, however, may only take years to resolve.

Plans to alleviate the power crisis

The SA Chamber of Commerce and Industry (Sacci) is proposing that South Africa be divided into four time zones to help alleviate the power crisis, providing a temporary solution where some provinces could being their working day earlier and others later. “The power is no longer an Eskom problem, it’s a national problem,” acting CEO Peggy Drodskie said, adding that this could be an immediate solution to relieve pressure on the grid.

Another immediate solution identified by Drodskie is to allow businesses to operate in shifts, without compensating labour for working outside normal hours. For instance, some businesses could operate from 8am to 4pm, others from 4pm to midnight, and the remainder from midnight to 8am. Implementing this three-shift system at the Medupi and Kusile power stations would speed up their entry to the grid.

What went wrong?

Eskom moved from stage 2 to stage 3 load shedding on Thursday, due to a further shortage of generation capacity as additional units have had to be taken out of service for unplanned maintenance caused by technical faults.

Eskom spokesperson Khulu Phasiwe said that “In total we have over 87 units within the Eskom fleet, and many of those units in all 27 power stations are not working optimally at this stage. It’s almost all our power stations that are experiencing all sorts of problems at this stage.”

“The risk of a blackout is remote at this stage. There are a number of measures that have been put in place to make sure that this does not happen. This includes mechanical and human resources that have been put in place so that we mitigate against a blackout,” he added.

Nevertheless, the power system remains constrained and will remain so for the rest of this week at least. “Any extra load or faults in the system may necessitate the need to go into load shedding. We therefore urge all electricity customers to reduce their consumption in order to reduce the severity of load shedding,” Eskom said.

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