Johannesburg - Business is bracing itself for more disruptions in the coming week as the end of the festive season is set to put a further strain on Eskom, which warned on Wednesday that the risk of power cuts was rising as the reopening of mines, factories and schools loomed.
South Africans have enjoyed an uninterrupted supply of electricity for close to a month, thanks to the year-end holiday lull. It gave Eskom a chance to do much-needed maintenance work and the opportunity to replenish its depleted diesel fuel supplies and water reserves for the pumped-storage schemes which use water to generate electricity.
FUNDING SQUEEZE
Even so, the power system continues to be strained due to unpredictable ageing infrastructure. The embattled power utility is also grappling with a funding squeeze, which could see it pressing regulatory authorities in the months ahead to allow for double-digit tariff hikes. A delay in the commissioning of the country’s two new power stations – Medupi and Kusile – has also compounded the power supply crisis.
“The power system remains vulnerable and we urge all South Africans to pull together over the next few months and use electricity sparingly at all times,” Eskom said earlier this week. The utility said it “continues to make progress with its programme of planned maintenance but the system remains tight”.
Power cuts, which are stimated to have now cost the economy about R300 billion since Eskom woes first surfaced in 2008, became commonplace towards the end of last year as Eskom instituted rolling blackouts to stave off a total meltdown of the grid.
A collapse of a coal storage silo at Majuba power station in Mpumalanga added to Eskom’s problems in November, and Eskom asked big industrial users of electricity to reduce consumption by at least 10 percent. To make matters worse, a portion of the capacity normally imported from Cahora Bassa became unavailable during one weekend in November as the plant underwent urgent planned maintenance.
At a press conference last month Eskom chief executive Tshediso Matona denied that Eskom was in crisis but cautioned that the power system would remain tight until the new power stations came on line, which could take anywhere from 12 to 18 months.
BAD FOR BUSINESS
Vusi Khumalo, the president of the SA Chamber of Commerce and Industry, said more load shedding would negatively affect local businesses and their competitiveness. “The impact of load shedding is big and negative. If the industry suffers, the country suffers,” said Khumalo.
Lynn McGregor, an expert on state-owned enterprises at the Stellenbosch Business School’s Centre for Corporate Governance, said power cuts would leave international investors asking questions whether the country had the infrastructure required for investment.
“We will definitely see more of load shedding. The good thing about Eskom is that they are communicating with the public and business but they are not on top of the situation. Unless they get their act together from now until May, we are going to have a very cold winter,” she said.
Energy Intensive User Group of Southern Africa’s (EIUG) spokesman Shaun Nel said extra power outages would have a serious impact on economic growth. EIUG represents South Africa’s largest energy consumers, who include mining companies and big manufacturers.
Eskom yesterday warned that its was witnessing an increase in power demand, raising the risk of power cuts.
“There has been a high risk of load shedding since Tuesday night when the demand started to increase. We will do everything in our power to avoid it, that’s why we appeal to people to reduce their electricity usage to avoid having to declare load shedding,” said Eskom spokesman Khulu Phasiwe.
On the labour front, the National Union of Metalworkers of SA (Numsa) is worried about possible job losses in the metal sector and has blamed companies for the lack of contingency plans. “We are worried that some employers will use this crisis to retrench workers. The metal sector is one industry we are worried about,” said Numsa’s top negotiator Steve Nhlapho.