More worries for economy as Eskom implements new power cuts
JOHANNESBURG - ESKOM yesterday put further pressure on the country’s struggling economy, announcing yet another four days of power cuts till Sunday.
The struggling power utility said that it would implement Stage 2 loadshedding due to loss of generation capacity
Eskom said two generation units at the Kusile Power Station tripped due to the failure of the main coal feed conveyor belts supplying coal to the units.
It said a unit each at the Kriel and Duvha power stations tripped due to unforeseen breakdowns, while the return to service of four generation units was delayed.
Eskom’s current planned maintenance is about 15 percent, with 11 units under maintenance, an equivalent of two entire power stations.
The power utility implemented 19 days of loadshedding from July to September as its ageing infrastructure struggles to meet demand.
Eskom implemented two days of power cuts at the end of December to preserve emergency generation reserves in preparation for higher demand expected during January as economic activity resumes.
Investec economist Lara Hodes said loadshedding had in most cases been suspended prematurely, these short periods of sporadic power cuts had been a consistent theme recently.
“The recently announced four-day round of power cuts, due to loss of generation capacity will impede economic activity, especially if it needs to be prolonged or moved to a higher level of load shedding,” Hodes said.
“Indeed, the return to an adjusted level 3 lockdown amid a second surge in infection rates, coupled with intermittent load shedding could put some strain on the economy in the near term.
“However the long-term trend for South Africa is one of improvement, albeit at a protracted rate.”
Loadshedding has been cited by various ratings agencies and economists as an albatross to South Africa’s economic growth 15 years after it was first implemented.
The power cuts were cited as the second largest hindrance to the economic growth in 2020 after the Covid-19 pandemic as the economy is expected to contract by a significant 7 percent.
BNP Paribas chief economist Jeffery Schultz said that the largest structural drag in the economy in 2021 would come from another year of unstable electricity supply.
Schultz said Eskom implemented record loadshedding in 2020, with more than 1 600GW of power generation taken offline.
He said that large swathes of loadshedding seemed unavoidable this year as well in the absence of a marked improvement in Eskom’s energy availability factor, which fell to just 55 percent in the early weeks of this month.
“In our view, slowing down the country’s widening energy deficit relies critically on continued easing of regulatory requirements in the energy sector and swift progress in the state’s programme to encourage independent producers of renewable energy.
“We think Eskom’s planned legal separation of its transmission business planned for end 2021 will also be instrumental in opening up the energy sector to more private-sector players and investment, while at the same time ultimately helping to keep a lid on domestic energy prices.”