“POWER CUTS ARE COSTING SOUTH AFRICA WELL OVER $40 MILLION PER DAY”: ECONOMIST

Sat 02 July 2022:

Due to frequent power outages that have affected both homes and businesses nationwide, South Africans are coping in the dark.

The country’s state-owned power firm Eskom extended the rolling power cuts this week after years of experience, leaving some citizens and companies without electricity for more than nine hours a day.

A strike by Eskom workers added to the utility’s woes including breakdowns of its aging coal-fired power plants, insufficient generation capacity and corruption, according to experts.

ACTION AGAINST STRIKING ESKOM WORKERS

Eskom CEO, Andre de Ruyter, says “We will be taking disciplinary action against workers that have been away unlawfully. That may include the application of the ‘no work, no pay’ principle. Where there are acts of intimidation and violence, the Eskom disciplinary code will apply and we will be processing the various investigations accordingly. Where there are criminal acts, these will be reported to the South African Police Service for them to investigate.

South Africans are being affected by the lengthy power outages during the colder Southern Hemisphere winter months, when electricity is used in many households for heat, lighting, and cooking.

Both small and large businesses have been forced to shut down for extended periods of time or spend a significant amount of money on diesel fuel to run generators. Customers and company owners are both extremely angry and frustrated with the frequent power outages, or load shedding as Eskom calls them.

The power blackouts are here to stay say experts who warn it will take years to substantially increase South Africa’s capacity to generate power. South Africa mines coal and relies heavily on coal-fired plants, which causes noticeable air pollution. The country is looking to increase power production from solar and other renewable sources.

“The big picture is that we were at least expecting (heavy power cuts) this winter,” said energy expert Hilton Trollip. “Eskom told us at the end of last year that there was a chronic power shortage … What that means is that until we have a substantial amount of extra generation on the grid, we will continue to be at the risk of load shedding at any stage. The question then is how bad will the load shedding be?”

He lamented the impact of the blackouts on the economy.

“The most direct economic consequence is when businesses have to stop production because they don’t have electricity … whether you have a factory, a travel agency or you have a shop,” said Trollip. “Whenever economic activity is disrupted because there is no electricity, that is a direct cost to the economy.”

The power cuts are costing South Africa well over $40 million per day and deterring investment, say economists. South Africa’s economy, Africa’s most developed, is already in recession and is suffering a 35% unemployment rate.

Small businesses in the country’s townships, suburbs and rural areas are among the hardest hit by the effects of the rolling blackouts, said Trollip.

At a news conference on Friday, Eskom CEO Andre de Ruyter claimed that President Cyril Ramaphosa had been personally briefed on the company’s efforts to keep the lights on and that the crisis was receiving serious attention.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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