[Opinion] No end to rolling blackouts anytime soon

Chris Hattingh | 09 Nov, 2022
It is also vital to bear in mind that Eskom’s problems effectively act as a hard cap on South Africa’s growth potential.

Eskom’s latest statutory assessment of the power system has found that the entity’s Energy Availability Factor (EAF) will range between an average low of 58% and an average high of 67% towards the end of 2027. The EAF measures output as a share of total installed capacity - or in other words, the amount of readily dispatchable electricity at a given point in time. Eskom’s EAF target is 74% – so far, for much of this year, it has hovered around 62%-65%, and at times it has even been as low as around 50%.

At present Eskom simply cannot keep up with all the various points of maintenance that are required to significantly improve EAF, and as a result South African businesses and consumers will need to make the requisite plans to deal with power outages on their own, as best as they can. Eskom’s own report indicates that it will be unable to meet the electricity needs of South Africa over the next five years – and even this may be too optimistic a projection, given just how much it is falling behind with basic maintenance and funding constraints, as well as ever more debt.

The report at hand also attempts to sketch various scenarios around energy demand, and Eskom’s ability (or lack thereof), in trying to up its supply capacity. If the worst-case scenario proves to come true, the energy supply gap will increase by 40% over the next five years. Additionally, in this worst case, the supply gap will widen from 18 terawatt-hour (TWh) in 2023, to 30TWh in 2027. According to Eskom’s own explanation, an energy gap of 18TWh is equivalent to the generation output by Matla Power Station at full load.

Eskom’s own report thus confirms the reality with which South Africans have had to deal for many years now – that they cannot rely on the state-owned monopoly to provide reliable electricity supply. In terms of macro policy reform, the lifting of the 100MW cap on self-generation was announced earlier this year. However, one still needs to obtain a licence from the National Energy Regulator of SA, and given the declining capacity of the state as well as various forms of corruption, it is unclear whether this process will be speedy or not - or possibly only benefit those with the necessary political connections and influence.

Eskom recently announced a new board. What should not be lost amidst the fanfare is the fact that the ruling party, the ANC, still views state entities such as Eskom as crucial for implementing and furthering the National Democratic Revolution (NDR). It needs state organs of such size and scope to shape society as it deems best. One of the ways in which it pursues the NDR is through cadre deployment. And so, regardless of which board members happen to be in place, Eskom’s operations and potential turnaround plans will always be subject to party interests, biases, and a sense of desperation to maintain patronage networks.

It is also vital to bear in mind that Eskom’s problems effectively act as a hard cap on South Africa’s growth potential. Just as economic activity rebounds slightly, and businesses try to up their activity, the supply side simply cannot keep up and fails, and in turn, rolling blackouts are then imposed. The country is therefore unlikely to breach the 2% GDP growth per year level anytime soon. This, in turn, means less substantive economic activity, lower confidence and investment, and fewer job opportunities being created over the long term.

Article originally appeared here.

CRA events are for subscribers only.

Click here to subscribe

Or click here to log in if you're already a subscriber