Load shedding to cost South Africa 350,000 jobs: PwC

While the return of load shedding is not unexpected, it will significantly impact the country’s economy and will lead directly to further job losses, says professional services firm PwC.

In a research note on Tuesday (26 October), PwC noted that the power outages are one of several domestic challenges that the government will need to address if it hopes to see significant economic growth post-pandemic.

This is despite many international and external factors which would otherwise bolster growth, it said.

“A key element in the economic outlook for Q4 2021 is the return of load shedding. After 11 weeks without power outages, South Africa was again hit with load-shedding during the second week of October.

“Unexpected power station breakdowns, delays in returning to service some other units under maintenance, and the quicker-than-expected depletion of emergency systems resulted in nearly 15,000 MW of capacity being out of action – that was nearly half of the power utility’s coal-powered fleet.”

PwC said that its baseline scenario has for some time assumed that power cuts would be back during the fourth quarter. Despite this, the group still expects heavy jobs losses to occur due to the power outages.

“Overall, we expect load-shedding to reduce 2021 GDP growth by three percentage points – and cost the country 350,000 in potential jobs,” it said.

Energy Thought Leader CEO Mike Rossouw has described Eskom’s predicament as dire, which he said, has pushed South Africa beyond the tipping point.

“Eskom is near a total collapse,” Rossouw said during a recent interview on radio station 702.

Rossouw is the former chair of the Energy Intensive Users Group and was brought on as an advisor at Eskom in 2014, answering directly to former CEO Collin Matjila.

“I don’t see a light at the end of the tunnel. In fact, I see a big train coming down the tunnel at us,” Rossouw said. “We’re going to see a lot more load-shedding and for much longer.”

He said that once Eskom reaches the point of collapse, everything will crumble with it — “Services, everything,” he said.

Rossouw said he does not hold out hope that Eskom can fix the issues plaguing its fleet of coal-fired power stations because South Africa’s politicians are not willing to do what it takes.

The energy expert said that the rate at which power plants are breaking down—including recently built ones like Medupi and Kusile—is profoundly concerning.

He also said that Eskom’s planning has collapsed, it is suffering from a lack of skills, and the execution of work is way below what it should be.

“The quality of work is such that some of those plants come out of maintenance, and they go straight back into a breakdown,” Rossouw said.

On top of that, the power utility lacks the funds to implement solutions like procuring electricity from independent power producers.

The only way out is for South Africa’s political leaders to step up and take the blame for what has happened. “Unfortunately, what has to be done is going to be unpleasant, politically and otherwise,” Rossouw said. “We don’t have the luxury of choices anymore.”

Last week, Eskom laid out its load shedding forecast for the next 18 months, noting that it expects rolling blackouts to feature heavily in South Africa for the foreseeable future.

Read: South Africa is at a crossroads, business directors warn