How load shedding could rear its ugly head in South Africa once again

Eskom’s recent performance has been much better than expected, but potential risks at large power stations mean that the state-owned company will not announce the end of load shedding.

Earlier this week, Eskom CEO Dan Marokane said the utility hopes to avoid load shedding during the summer as long as outages remain below 13,000 MW.

The county has not experienced load shedding for over 150 days, with unplanned losses averaging roughly 12,4000 MW since April. This is much better than the expected 15,500 MW due to an improved performance at the group’s coal fleet.

Eskom warned that load shedding could return if breakdowns return to over 15,000 MW.

However, this is not in the group’s baseline scenario, and the utility is confident it can maintain its current outperformance.

Marokane added that the group had reduced its diesel bill by R10 billion year-on-year amid the drop in diesel.

He added that the turnaround on the generation side has led to a massive company morale boost, with analysts and economics highlighting the positive impact on the economy.

That said, the group is not getting complacent and will be cautious with its outlook for summer (1 September 2024 to 31 March 2025).

The end of load shedding cannot be declared, and the possibility of their return cannot be discounted.

The Bureau for Economic Research (BER) said that possible delays in the pending return of large generation units, including those at Kusile, Medupi and Koeberg, could throw a spanner in the works.

“This is partly why Eskom does not want to call the end of load shedding (yet), but the outlook seems promising,” said the BER.

That said, the positive turn in generation over the last 150 days means that Eskom’s projections heading into summer are far more positive.

The breakdown scenario has been revised from a best-case scenario of 13,000MW worth of outages to a worst-case scenario of 15,000MW. This is a downward revision from 15,000MW and 17,000MW projected during the winter outlook earlier this year.

Even if breakdowns exceed 15,000 MW, load shedding will likely be capped at stage 2.

Many businesses and households already have buffers for load shedding, meaning that stage 2 is unlikely to have the devastating impact it previously had.

Big Changes for SOEs

Over the last week, President Cyril Ramaphosa assigned shareholder responsibility for the SOEs that previously fell under the Department of Public Enterprises (DPE) to the respective line-function ministries.

This means the Minister of Electricity and Energy oversees Eskom, while Transnet falls under the Transport Minister.

Therefore, legislation previously administered by the Minister of Mineral Resources and Energy has been transferred to the Minister of Mineral and Petroleum Resources and the Minister of Electricity and Energy.

Nevertheless, the split has not yet happened, and until it does, the Department of Mineral Resources and Energy will continue to exist, with Gwede Mantashe still in charge.

“The Department of Mineral Resources and Energy [DMRE] will continue to exist until the legislation and relevant human and financial resources are transferred,” the presidency said in a statement earlier this week.

The DMRE will then be replaced by two different departments: The Department of Mineral and Petroleum Resources and the Department of Electricity and Energy.

“As an interim arrangement, the Minister of Mineral and Petroleum Resources (Gwede Mantashe) has been assigned responsibility for [the] DMRE.

“A Memorandum of Agreement will be entered into to ensure that DMRE provides the necessary support to the Minister of Electricity and Energy for the remainder of the 2024/2025 financial year and until a new Department of Electricity and Energy is established and resourced,” it said.

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