S.Africa: Electricity: Load shedding is getting better – but it won’t end anytime soon
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South Africa may have experienced lower levels of load shedding in recent weeks, but South Africans should not expect rolling power cuts to end in the near future.
Eskom has kept load shedding at lower levels in recent weeks, with the power utility regularly suspending load shedding during the day and then escalating to stage 2 during the evenings.
Although load shedding has not disappeared, it is far removed from the high levels of stage 6 seen before heading into winter.
Electricity Minister Kgosientsho Ramokgopa said that the improvement in load shedding is due to an increase in planned maintenance, ensuring that unplanned outages are kept at lower levels.
“There’s a correlation between planned maintenance and the rate of failures of the units. The team is seeing when they return the units; these units remain on load for longer periods… their efficiency and reliability are improving,” he said.
For instance, yesterday, 15 October, Eskom were able to keep load shedding suspended, with breakdowns standing at 13,158MW, whilst planned maintenance stood at 6,051MW of generation capacity.
Eskom’s summer plan states that it wants to keep unplanned outages below 15,400 MW, limiting load shedding to a maximum level of stage 4, but breakdown levels have been tracking at around 14,000 MW over the last few weeks.
According to Nedbank’s latest Guide to the Economy, the South African economy fared far better in Q2 2023 due to lessened load shedding and increased renewable energy projects.
“However, the economy lacks upward traction, and underlying trading conditions remain highly unfavourable,” Nedbank said.
Despite the recent reduction in load shedding, Q3 still saw bouts of heightened load shedding, which likely resulted in real GDP relapsing during the quarter amid decreased output and higher operating costs.
“Subdued global demand, lower commodity prices and infrastructure constraints will continue to undermine export-orientated industries. At the same time, limited job creation, slower income growth and tighter credit conditions will weigh on consumer spending,” Nedbank said.
“Although fixed investment will be propped up by increased outlays renewable energy and embedded generation, the country’s structural challenges and the downturns in the domestic and global business cycles are still expected to result in softer activity in the final quarters of this year and throughout next year.”
Real GDP growth in the first half of the year totalled 0.9% year-on-year, and this unexpected resilience lifted the group’s 2023 GDP forecast from 0.3% to 0.6% this year. However, load shedding remains the key area of uncertainty for the economy.
Ramokgopa said that Eskom restored more units ahead of schedule, which should increase power supply during Q4.
“However, frequent unplanned breakdowns at the older power stations remain a concern, suggesting that the economy will still be subjected to some degree of load shedding, probably for the next three years,” Nedbank said.
With this in mind, the economy will not rebound quickly, with the financial services provider forecasting GDP growth of only 1% in 2024 and 1.5% in 2025.
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