How much load shedding costs South Africa

Every time Eskom turns off the power, the South African economy loses billions

By - February 9, 2015 Share on LinkedIn
Eskom light

Economists have warned that load shedding by Eskom is going to be massively detrimental to South Africa’s economic growth.

In January, the International Monetary Fund stated that a prolonged period of load shedding would see the country’s economy only grow by 2.1% in 2015, with local economists echoing these sentiments.

In addition to lower growth rates, Eskom also plans to institute an electricity tariff hike in April which will likely put further pressure on the country’s finances.

Energy expert Chris Yelland has now provided more detail on just how much blackouts are costing the South African economy.

According to Yelland, the controlled blackouts since December 2014 have had a “serious negative economic impact”.

The cost to the economy during stage 1 load shedding – 10 hours of blackouts per day for 20 days a month – is R20 billion per month.

Stage 2 load shedding, using the same time parameters, costs the economy R40 billion per month, while stage 3 is estimated to cost SA R80 billion per month.

“These costs to the productive economy for load shedding in SA are based on a cost of unserved energy of R100 per kWh,” said Yelland.

A recent technical fault at the Koeberg nuclear power plant resulted in one of its 900MW units going offline last week, which incurred further costs to SA and Eskom.

“The cost of unserved energy to the productive economy in SA caused by this Eskom “human error” at Koeberg is estimated to be R7.5-billion,” said Yelland.

Yelland added that Eskom’s additional diesel costs for one week due to the “human error” at Koeberg is estimated to be R250 million.

The following infographic shows just how much load shedding is costing South Africa’s economy.

Cost to SA's economy

Cost to SA’s economy

In addition to faults at existing power stations, it was reported on 9 February that the synchronization of Medupi Power Station’s first unit will be further delayed by six weeks to the end of March 2015.

The report follows the recent disclosure by Eskom that the commercial operation date for the first unit at Eskom’s Kusile power station has been delayed by a year from mid 2016 to mid 2017.

Medupi and Kusile are now only expected to be fully on stream delivering commercial power into the grid by 2019 and 2020 respectively – both years behind schedule.

More Eskom news

Please load shed daily until May, Eskom

Not black enough for Eskom

Sinking into Eskom’s financial black hole

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