Power outages to get worse
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By Thabiso Thakali and Christina Gallagher
South Africans have been warned to prepare for power cuts, gridlock and general disruption. "It's going to get worse before it gets better," admitted Eskom's chief executive Jacob Maroga in a frank interview with the Saturday Star on Friday.
His admission comes after Eskom warned this week that the rolling blackouts would continue throughout next week. Earlier it had warned South Africa would suffer power shortages for between five to eight years while supply is extended.
This week Eskom "loadshedded" 3 000mW of power - the highest ever in the country's history. Consumers experienced blackouts several times a day, as Eskom struggled to deal with what it termed a "stage 2" emergency on a scale of four.
Stage 4 represents a cataclysmic collapse of the national power grid.
And, while South Africans fume, an economist estimates the blackouts are costing local industry up to R2-billion a day.
Fanie Joubert, an economist at the Efficient Group, said he based this on an average three hour power cut. He added that although this figure was a "rough estimate", he believed it was realistic based on this year's predicted GDP growth.
Eskom has embarked on a programme to increase the country's supply capacity including commissioning several new coal fired and nuclear power stations and recommissioning mothballed power stations.
It also plans to buy excess power capacity from companies producing their own. It also announced a subsidy scheme to help homeowners install solar heat.
'In this short period we need to look at how we can reduce the demand'
The power crisis has severely dented South Africa's image as an investment destination, putting billions of rands in foreign investment in jeopardy.
Frost & Sullivan, an international growth consulting firm, warned this week the power crisis could cost South Africa its ranking in the Foreign Direct Investment (FDI) Confidence Index's Top 20. South Africa made its debut on the index, which lists the world's most attractive investment destinations, last month. It is the only African country on the index.
Mike Schussler, an economist with T-SEC, also predicted that the current power crisis would negatively affect economic growth, lead to job losses and have a dire impact on the inflation rate.
Maroga said Eskom could not predict the frequency of the power cuts, but warned of a "high probability" of further load shedding years into the future if demand exceeded Eskom's ability to supply.
Urging all South Africans to cut back on their electricity usage, Maroga said: "We are in a very tight demand and supply situation.
"We know how long it will take us to build new power stations, but in this short period we need to look at how we can reduce the demand.
"Two things that could relieve the situation are bringing back the power stations that are currently on unplanned maintenance and to reduce consumption, which would lead to an increase in the reserve margin," said Maroga.
The current reserve margin is estimated to be less than 10 percent.
Meanwhile, Public Protector Lawrence Mushwana wrote to Maroga this week wanting to know what steps Eskom had taken to prevent the current situation and how long it would last.
He also asked if hospitals and police stations would be protected from blackouts.
A confidential document compiled by a senior municipal official in Port Elizabeth has revealed that the National Integrated Resource Plan compiled by the National Energy Regulator of South Africa (Nersa) up until 2022, had inadequately planned for future energy needs.
Government's plans, incorporating the present coal-fired power stations, did not account for the fact that these stations' output would, over time, decrease due to use, according to Nelson Mandela Bay power supply director George Ferreira.
The government plan said new the coal-fired stations, which would take at least seven years to build, would have to rely on costly clean coal technology, which will be more expensive than either gas or nuclear power stations.
It was also predicted that because of bad planning, including delayed environmental impact assessment studies, the energy crisis would not "normalise" until 2016.
Marius Louw, of the Chamber of Commerce and Industry South Africa said the power crisis was a "sad state of affairs", adding that the daily three hour power cuts were leading to two days of business lost each week.
"The only way to make up for this is for businesses to lay off their employees and consumers are going to have to pay for the increases in business costs," he said.
