Eskom’s worst week ever

As South Africa faces yet another week of load shedding, the country’s energy crisis continues unabated with Eskom continuing to reach new lows.

Eskom announced on Sunday (25 September) that load shedding will continue this week at stage 3 during the day (00h00 to 16h00) – escalating to stage 4 during the evening (16h00 to 00h00).

This is expected to continue until at least Thursday, with further updates coming during the week.

According to the Bureau for Economic Research (BER), this is coming on the tail end of the worst week of load shedding in Eskom’s history.

“The week before last was already the worst on record for the Energy Availability Factor (EAF). This is likely to have worsened further last week,” the BER said.

EAF for the week ending 16 September saw availability as low as 53.16%. Last week started with stage 6 load shedding, which was only lowered to stage 4 by the weekend, the BER said.

Energy availability for 2022 is estimated to be 51%.

Load shedding tracking app, EskomSePush, revealed that South Africa had experienced 1,637 hours of national load-shedding over 68 days so far in 2022.

It was significantly higher than the 1,153 hours over 48 days in 2021 and the 844 hours over 35 days in 2020.

The last year has also seen higher load-shedding stages for longer, which is particularly damaging to businesses.

Over the last five years, there has been a clear trend of increasing load shedding caused by breakdowns at power plants.

Updates from Eskom show how bad the situation has become. Of about 50,000MW of installed capacity on Sunday, only 26,360MW was available (53%). Meanwhile, demand was closer to 27,000MW.

Evening Peak Feedback 25/09/2022, 18:32
Total demand: 26 881MW
Loadshedding: 2 624MW
Eskom OCGT’s Utilised: 9
IPP OCGT’s Utilised: 2
Renewable Gen: 1 880MW (Wind 1 793MW, CSP 87MW)@Eskom_SA Available Generation Capacity: 26 357MW@EskomSpokesper1

— SikonathiMantshantsh (@SikonathiM) September 25, 2022

Impact

The BER noted that the near-constant load shedding is likely to wreak havoc on the economy and could push the country into a technical recession.

“While Stats SA will only release the high-frequency activity data for September in the first half of November, the extent of the current load-shedding would not only have weighed directly on electricity generation – which forms part of the GDP calculation – but also on sectors such as mining, manufacturing and agriculture that are heavy users of electricity,” it said.

“In all, this detracts from the expected recovery in quarterly GDP during 2022Q3 after the 0.7% contraction in Q2.”

Load shedding is also putting pressure on other major economic indicators, including interest rates, and the rand, the BER said.

While both of these indicators are overwhelmingly being pushed weaker by international moves – like the US Fed’s aggressive hiking strategy and the stronger dollar – both come under pressure from short-term economic losses and GDP growth concerns.

Sustained stage 5 load shedding is a factor, the BER said.

“The sustained weaker rand is one of the more important risks,” it said. “Despite the 75bps SARB policy rate hike and the fact that two monetary policy committee (MPC) members preferred a 100bps move, the local currency lost further ground last week.

“While sustained stage 5 load-shedding may provide part of the explanation, this is rather a strong dollar story as the US central bank (Fed) signalled last week that further aggressive policy rate hikes are likely in the rest of the year.”

Read: Stage 3 and 4 load shedding this week – here is the schedule