Ramaphosa’s load shedding warning
President Cyril Ramaphosa has welcomed Eskom’s announcement of 100 days of no load shedding but warned that the achievement should not invite complacency as the electricity system remains vulnerable.
Writing in his weekly letter to the public, the president said that 100 days of load shedding “is not a reason to relax”.
“Our electricity system remains vulnerable, and we cannot yet rule out a possibility of further load shedding,” he said.
Instead, he said the milestone should be used to encourage accelerated reforms in the electricity space so that the country can ensure and secure the supply of electricity for the future.
“We are committed to continue and complete the far-reaching structural reforms we started during the sixth administration to resolve the immediate electricity supply challenges and lay the groundwork for energy security into the future,” he said.
“These reforms included the removal of the licensing threshold for new power generation projects, tax incentives for rooftop solar, opening more bid windows for renewable energy projects, and improving Eskom’s operational viability.”
As the Government of National Unity begins its work, the seventh administration will sustain this momentum, he said.
Load shedding progress
Eskom last week announced that it had hit the milestone of 100 days without national outages. This has now moved to 103 days, with the utility optimistic that it will continue.
While the extended suspension of outages is due to a significant turnaround in Eskom’s operations— including bringing breakdowns to under 12,000MW and cutting spending on OCGTs—the relief has also come from other successes.
This includes the successful commissioning of Unit 5 at the Kusile power station, adding an additional 800 MW to the grid. This followed the power utility’s work to return three units at Kusile to service ahead of schedule, with unit 6 expected to be synchronised to the grid by the end of the year.
Eskom also anticipates the return of Koeberg Unit 2 by November 2024, which will add close to another 1,000MW back to the grid over time.
Another development that has impacted grid stability is the massive decline in user demand, largely as a result of households and industries seeking own-generation or alternative energy.
While these numbers and the impact are not exact, Eskom has noted approximately 5,500MW of solar and renewable generation outside of Eskom, while analysts have pointed to a 1,500-2,000MW permanent drop in demand as a result.
Positive impact
Regardless of the ‘true’ sources of the turnaround, the break from load shedding has already had a hugely positive impact on the country.
The improvement in the reliability of power supply has been a relief for households, who have been able to go about their daily lives without the inconvenience of load shedding – and it has also been a great relief for businesses.
The latest consumer confidence index compiled by the Bureau for Economic Research (BER) found that the suspension of load shedding was a factor that contributed towards increased consumer confidence in the second quarter of this year.
This improvement is also a boost to the national economy, which is reliant on the availability and reliability of electricity supply for growth.
“There is cause for optimism that business and investor confidence will improve,” Ramaphosa said.
In its April Monetary Policy Review, the South African Reserve Bank noted that “as electricity supply improves gradually, underpinned by the ongoing private investment in renewable energy generation and increased maintenance by Eskom”, South Africa’s near and medium-term outlook for growth is set to increase.
The Reserve Bank underscored the importance of the full implementation of energy and logistics sector reforms if growth is to improve.
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