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Load-shedding? Or blackout?

In May President Jacob Zuma visited the Eskom head office and declared that there will never be load-shedding again. This sentiment has been expressed by the parastatal’s leadership too, based on the fact that it has not had to implement load-shedding in the country for more than a year now.

Great news then – the electricity crisis is over. Or is it? After all, if that was the case, why are there still so many blackouts across the country, especially around Gauteng – are these blackouts not load-shedding then?

Well, no, they’re not. There’s no reason to doubt Eskom when it says there has not been any load-shedding for over a year. There has simply been no reason to implement load-shedding.

Back in 2007, the fundamental issue underlying the country’s power challenges was the need for the additional power-generation capacity. By 2007, Eskom had not added any new generation capacity to the fleet it had inherited from the apartheid government in 1994.

At the same time the demand for electricity was increasing as the economy grew rapidly. This ultimately led to load-shedding, which kicked off around November 2007 and by 2014 had wiped an estimated R300bn off the economy. Back then the economy had been growing at above 4% and was well on track to hit levels of 6%.

Unfortunately the power crisis kicked the legs out from under the economy at a time when commodity prices were soaring and the country could least afford it. Something had to be done quickly to fix the situation and increase power-generation capacity.

First Eskom brought three mothballed power stations back online – Komati, Camden and Grootvlei. This process cost around R30bn, in hindsight a great investment and surely one of Eskom’s greatest achievements in the past 10 years.

The parastatal also added diesel-powered turbines over a very short period. These came at a huge operating cost though – in 2008 Eskom’s diesel bill was R80m. In 2014/15 the cost for diesel alone was around R1bn per month!

These initiatives certainly prevented a blackout.

Fast forward a year and a half to 2016 and today Eskom and government can comfortably say that load-shedding is a thing of the past. How has this been made possible? Only through the initiatives mentioned? No.

The biggest reason why the electricity system has been able to recover and stabilise so well is because economic growth has plummeted. This has been led by the global drop in demand for commodities – impacting massively on South Africa’s energy-hungry mining industry.

South Africa is in all likelihood already in a recession. In fact, the most recent report on GDP figures for the country, released by Stats SA in June, found that GDP had contracted by 1.2% quarter-on-quarter.

The low economic growth and accompanying lack of demand for electricity has given Eskom the much-needed space to do maintenance on its older plants.

Over the past 12 months the maintenance done has led to the reliability of Eskom’s units improving from a low of 70% in 2014/15 to almost 80% at present.

Eskom has also managed to bring the first of six Medupi generating units online, adding 800MW to the grid with independent power producers – according to Eskom – adding another 1800MW to date.

Greater stability in leadership at Eskom following the permanent appointment of Brian Molefe as CEO has also contributed to the improved situation.   

So what’s with the blackouts happening across the country then? Those blackouts are mostly caused by local power grids that are collapsing due to lack of maintenance by a local municipality or illegal connections and cable theft that overload the grid and cause systems to trip.

Years of underinvestment into transmission and distribution grids, as well as increased demand on municipalities to deliver power, is now catching up with us. And this time, it’s not really Eskom’s fault.

James-Brent Styan authored a book on the energy crisis called Blackout: The Eskom Crisis, published in 2015. He writes in his personal capacity.

This article originally appeared in the 7 July edition of finweek. Buy and download the magazine here.

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