CAPE TOWN – The Statistics South Africa data for November 2019 showed that electricity consumption continued to decline on a year-on-year basis as the repeated load-shedding episodes instituted by Eskom since November 2018 sapped business confidence.
In November 2019, consumption declined by 3.1 percent year on year after a 2.1 percent year-on-year fall in October. So far in 2019 there has only been two months when consumption showed positive year-on-year increases.
In the first 11 months, consumption is down 1.7 percent year on year compared with a 0.9 percent increase in 2018, when only April showed a year-on-year decline.
Eskom instituted load shedding on an intermittent basis since November 29 2018 after the connection with Mozambique broke down and it lost 700 Megawatts (MW) of power imports.
For most of 2019, however, it has been its own plant availability that has constrained supply with the Energy Availability Factor (EAF) dropping to only 57.95 percent in the last week of 2019.
This compared with an average of 66.94 percent for the full year and 71.84 percent in 2018 and 78.61 percent in 2017. The EAF in the last week of 2019 was made up of planned outages at 12.27 percent, unplanned outages at 27.79 percent and other outage factors at 1.99 percent.
Investec chief economist Annabel Bishop said the decline in electricity consumption and poor start to 2020 meant there was a risk that South Africa could fall back into a recession, defined as two consecutive quarters of contraction, with a contraction in the fourth quarter 2019 followed by one in the first quarter of 2020.
“The fall in electricity production deepens in November, and will worsen in December, increasing the chance of a supply-side recession. In the absence of substantial repair of South Africa’s electricity capacity, of which adhering to planned maintenance regimes is key, producers relying on state supplied electricity would risk their productive capacity reducing even further going forward, particularly as power stations age further.
A GDP contraction is expected in the first quarter 2020 as well. The first quarter of each calendar year has seen a contraction in GDP in the past four years. Eskom indicates rising planned maintenance in the first quarter and even greater losses to the grid of unplanned outages versus planned outages,” she wrote in her reaction piece.
The 2017 increase in electricity consumption of 0.5 percent followed two years of declining consumption as state-owned electricity utility Eskom was unable to meet demand and had to institute rotational load-shedding.
Rotational load shedding normally means a suburb will lose up to two hours a day in a stage 1 situation when Eskom is short 1 000 MW or three hours a day in a stage 2 or 2 000 MW shortfall event. In December 2019 Eskom had to institute an unprecedented Stage 6 load shedding schedule when it was short of 6 000 MW.
In 2015 national electricity consumption fell by 1.2 percent and in 2016 it dropped by 1 percent. This meant that the total annual consumption of 229,342 Gigawatt-hours (GWh)in 2017 was less than the 2007 total of 241,170 GWh even though the population and the economy grew by more than 10 percent during this period.
What has mitigated the effects of the problems at Eskom has been power supplied by Independent Power Producers (IPP). The amount produced by IPPs has increased from only 884 GWh in December 2007 to 2 124 GWh in December 2018, when it accounted for 10.4 percent of total generation.
In the first eleven months of 2019, the power supplied by Eskom declined by 3,903 GWh, while the power supplied by the IPPs increased by 942 GWh. The government is looking for a further 500 MW from IPPs to be supplied in the next two years so as to give Eskom the room to carry out more planned maintenance.