As South Africa faces yet another week of load-shedding, the country’s energy crisis is worsening at a dangerous speed when you compare energy data over the past decade.
Eskom announced on Sunday (2 October) that load shedding will continue this week at stage 3 until 05h00 on Thursday due to a shortage of generation capacity as a result of persistently high levels of breakdowns.
So far, 2022 has been South Africa’s most intensive load-shedding year to date, as Eskom’s coal fleet continues to deteriorate.
Data from South Africa’s Council for Scientific and Industrial Research (CSIR) showed that Eskom had cut 2,276GWh of electricity in the first six months of 2022 – more than 90% of the 2,521GWh it shed for the entire 2021.
According to EskomSePush, as of the start of this week (3 October), the country has experienced 1,949 hours (81 days) of national load shedding in 2022.
This is significantly higher than the 1,153 hours over 48 days in 2021 and the 844 hours over 35 days in 2020.
The graph below shows the number of load-shedding hours each year from 2015 to date, sourced from EskomSePush.
This comparison will worsen even further as 2022 still has three months to go until the end of the year, adding more days of load-shedding to its total.
Over the past decade, there has been a clear and concerning trend of a rapid increase in load-shedding caused by breakdowns at power plants.
While there are several important factors related to load-shedding, the most telling indicator is the Energy Availability Factor (EAF) – which is the difference between the maximum availability and all unavailabilities (PCLF, UCLF & OCLF) expressed as a percentage. This excludes renewables, IPPs and international imports.
The graph below shows Eskom’s energy availability from 2013 to date, according to Eskom’s integrated annual reports and the estimated EAF for 2022.
For the year to end-March, the state-owned utility reported an overall EAF of 62%, but load-shedding has intensified since then, with the coal fleet’s EAF dipping well below 60% at times.
EAF for the week ending 16 September saw availability as low as 53.16% amid the commencement of stage 6 load shedding last month, with energy availability for 2022 now estimated to be around 51%.
South Africa’s Integrated Resource Plan of 2019 (IRP 2019), which outlines the technologies needed to ensure supply security to 2030, assumes an EAF of at least 70%, rising to 75% by mid-decade (2025), and a shortfall supply of around 2,000 MW.
The reality, however, is a horror show. The supply deficit is between double and triple than initially planned, with Eskom calculating the shortfall to be between 4,000 MW and 6,000 MW.
Updates from Eskom show how bad the situation has become. Of about 50,000MW of installed capacity on Sunday (1 October 2022), only 26,486MW was available (53%). Meanwhile, demand was closer to 27,430MW.
Things are going to get worse
According to the CSIR, the outlook for the next year shows that Eskom will face a shortage of 2,001MW or higher for 49 out of the 52 weeks.
Presenting its system status and outlook to the joint portfolio committee on public enterprises and mineral resources and energy in August, Eskom’s forecast for load shedding over the next few months and extending into 2023 is bleak.
In the group’s baseline scenario of having around 13,000MW of power taken off the grid due to unplanned outages, the power utility presents an optimistic forecast of only a few days of low-stage load shedding through to August 2023.
However, it has so far been unable to meet this already low bar. In its worst-case scenario, where outages exceed 16,000MW, stage 3 and stage 4 load shedding are the daily norm, with Eskom relying on billions of rands’ worth of diesel to keep the blackouts capped.
The harsh reality is that Eskom is physically limited in how much diesel it can use – so even its worst-case scenario figures are distorted. For instance, on some days, it says it can cap load shedding to stage 4 if it can burn through R6.4 billion worth of diesel.
Eskom said that history has shown that it is not possible to use more than R2.4 billion worth of diesel in a month due to the physical limitations of moving the diesel to the OCGT stations, however.
Where its forecast shows a diesel usage greater than this, additional stages of load shedding should be expected, it said.
These periods are highlighted in red below:
Economic impacts of prolonged load-shedding
According to Intellidex analyst Peter Attard Montalto, load shedding is likely to get far worse before president Cyril Ramaphosa’s energy plan starts delivering results, saying that South Africans should expect stage 6 to stage 8 load shedding in the coming months.
He also noted that the economic impact of stage 2 load shedding has softened due to the country adapting – now costing the economy between R150 million and R250 million a day – but the persistently high stages are having devastating long-term effects, particularly on foreign investment.
Pan-African Investments and Research Services CEO Iraj Abedian says the silent economic costs of a decade’s worth of load-shedding are simply unquantifiable, and any number would vastly underestimate the economic, social, and structural impact it had.
“No econometric technique can justly take care of how much the South African brand, government brand, and the country’s citizens have suffered,” he said.
He also noted that the national gross investment numbers across all sectors of the economy have fallen to a fraction of what they should be and what it was before 2008.
Some of the silent economic costs due to prolonged load-shedding in South Africa that Abedian says will never be quantifiable include:
- Hundreds of thousands of jobs were lost due to load-shedding and jobs that could have been created in its absence.
- The export of capital that has been used to supplement the impacts of load-shedding.
- The loss of confidence in the democratic government by its citizens.
- The loss of industry talent and skilled labour to mass emigration.
The BER noted that the near-constant load shedding is wreaking havoc on the economy and could push the country into a technical recession.
Dr Francois Stofberg, senior economist at the Efficient Group, has previously estimated that the country’s economy is between 8% and 10% smaller than it could have been if we were not plagued by Eskom’s inefficiencies and ongoing load shedding.