Power cuts cost South Africa up to $8.3bn in 2019

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Men walk past electricity pylons as they return from work in Orlando, Soweto township, South Africa March 18, 2019. REUTERS/Siphiwe Sibeko

 

File photo: Men walk past electricity pylons as they return from work in Orlando, Soweto township, South Africa March 18, 2019. REUTERS.

Power cuts by state utility cost the South African economy up to 120 billion rand ($8.3 billion) last year and will probably persist for the next two to three years, research by the country’s national science council showed.

The power cuts are one of the biggest challenges facing President Cyril Ramaphosa as he tries to revive investor confidence in Africa’s most industrialised economy.

Ramaphosa has promised to break up Eskom to make it more efficient and granted it a series of mammoth bailouts to stabilise its finances, but its coal-fired power plants keep breaking down after years of mismanagement.

The Council for Scientific and Industrial Research (CSIR) urged the government to move swiftly to ease regulations governing “self-generation” of electricity by companies and households as a way to minimise power cuts in 2020.

Other government initiatives, such as giving independent power producers the go-ahead to build new plants, could only help reduce the scale of power cuts from 2021 if procurement processes are expedited or from 2022 under normal circumstances, the CSIR research showed.

Ramaphosa promised in a speech to business leaders this month that he would embrace efforts by businesses and households to generate their own electricity, but his government is yet to follow through with the necessary regulatory reforms.

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