JOHANNESBURG - The April data released so far points to weak start for the KwaZulu-Natal (KZN) economy in the second quarter, as electricity consumption fell by 2.3% year-on-year (y/y).
The electricity supply and demand data is the first hard economic data that Statistics South Africa (Stats SA) releases that is comparable to the way that it calculates the national accounts, in other words the raw data is adjusted to take account of seasonal effects.
We have already received the foreign trade data from the Sa Revenue Service (SARS) that showed a large R9.8 billion or 9.8% decline in April exports compared with March, even though bulk export volumes grew to 12.1 million tonnes in April from 10.8 million tonnes in March, according to Transnet National Ports Authority (TNPA) data.
As former Eskom group chief executive Brian Molefe said: “Eskom is now delivering excess electricity capacity to help stimulate South Africa’s economic growth. Our 5-year plan to the 2020/21 financial year aims to re-establish Eskom as a catalyst for economic growth, and not a constraint to the country’s future growth.”
There, however, needs to be increased demand, and that seems to be lacking in April in the KZN economy.
Although Eskom has been in the news recently due to a rundown of coal stockpiles at some of its power stations, new group chief executive Phakamani Hadebe said electricity supply would not be a growth constraint this year or in the foreseeable future.
Eskom last load shed two-and a -half years ago on September 14 2015 for 2 hours and 20 minutes.
The reason for Hadebe’s optimism is that some units of Kusile and Medupi have already been connected to the national grid, while the Ingula pumped storage scheme reduces the need for expensive peaking power from the diesel-fired Open Cycle Gas Turbines. This means that Eskom has an operational reserve of 3.75 Gigawatt (GW) or 25% compared with peak demand of 30 GW at the end of March. Winter demand adds 3 GW, but that is offset by a reduction in planned maintenance of similar magnitude.
In a review of the progress in the new build programme, Hadebe pointed out that Medupi Unit 5 and Unit 4 were commercialised on April 3 2017 and November 28 2017 respectively, each with an installed capacity of 794 Megawatts (MW), while Kusile Unit 1 was commercialised on August 30 2017, with an installed capacity of 799MW. Kusile Unit 2 and Medupi Unit 3 were first synchronised to the national grid on March 24 2018 and April 8 2018 and will be commercialised shortly, so there is more than enough electricity available when the KZN economy revives.
- BUSINESS REPORT