Contact Info

This load-shedding chart shows just how bad 2020 has been

The South African Reserve Bank (SARB) recently published a chart which illustrates just how bad load-shedding has been this year.

According to the SARB, South Africa experienced the worst ever load shedding in 2020, with the total gigawatt-hours shed surpassing the 2019 record in August.

Cumulative shedding for 2020 is already 23% worse than in 2019 – even though real GDP is currently about 9% lower than it was this time in 2019.

What is particularly worrisome is that this record load-shedding took place despite the extended lockdown which significantly lowered demand for electricity.

The lower demand not only helped to stave off load-shedding, but it also gave the national power utility an opportunity to perform maintenance.

Eskom CEO Andre de Ruyter said in April that Eskom has been able to double down on short-term maintenance thanks to reduced demand during the lockdown.

He did, however, warn that Eskom still had a lot of work to do to catch up with 10 years of neglect that needs to be repaired.

Despite the challenging position Eskom found itself in, De Ruyter told South Africans they could expect only three days of stage 1 load-shedding during winter.

It was not long before he was proven wrong. Load-shedding returned in July and to date, there has been regular load-shedding which has often reached stage 4.

The chart below shows the cumulative load-shedding, measured in GWh, in 2015, 2018, 2019, and 2020.

Bad news for economic growth

Many economists and business leaders said load-shedding will seriously hurt South Africa’s already struggling economy.

Efficient Group economist Dawie Roodt said the limited power supply is one of the biggest constraints to economic growth in South Africa.

He warned that people should not expect a quick economic recovery following the lockdown, especially with regular power cuts holding back business growth.

Cape Chamber of Commerce CEO, Geoff Jacobs said businesses are held ransom by Eskom’s inability to fix the company and provide a stable power supply.

“Every business that does not have alternative sources of electricity shuts down when Eskom imposes what it calls load-shedding,” he said.

Durban Chamber of Commerce and Industry CEO Palesa Phili said load-shedding is hitting small- and medium-sized business particularly hard.

Phili said the power outages cause productivity declines, which in turn result in a loss of revenue and an economic contraction.

Western Cape Finance and Economic Development Minister, David Maynier said the power cuts were a blow to the province’s already struggling economy.

He added that the government can easily change the situation by allowing self-generation and lifting limits on private power producers.

DA Shadow Minister of Mineral Resources and Energy Kevin Mileham said the ANC government would much rather continue to drag the nation down by holding onto outdated ideas instead of doing the right thing and breaking Eskom’s deadly monopolistic grip on South Africa’s energy supply.

“South Africa cannot afford to continue being beholden to Eskom if it has any hope of stimulating economic growth,” said Mileham.

“It is untenable for South African businesses to emerge from the economically devastating effects of COVID-19 regulations only to be further crippled by an unstable electricity supply.”

South African Reserve Bank comment

Now read: Eskom CEO Andre de Ruyter releases explosive report about corruption, nepotism, and victimisation

Source