Self-generation of electricity by South African businesses and households is likely to reduce rolling blackouts without compromising the state power utility\u2019s business model, according to the continent\u2019s biggest bank.<\/p>\n
As much as 1,000 megawatts of additional generating capacity from privately owned auxiliary power systems could be added annually in Africa\u2019s most industrialized economy, said Goolam Ballim, chief economist at Standard Bank Group Ltd. That\u2019s equivalent to a one-stage reduction in power outages, known locally as load shedding.<\/p>\n
Eskom, which provides most of South Africa\u2019s electricity, has been struggling to meet demand since 2008, and has subjected the nation to blackouts every day so far this year to protect the grid from collapse.<\/p>\n
While the utility has said an additional 4,000 to 6,000 megawatts of capacity is needed, new projects have been slow to come online.<\/p>\n
Businesses and households that \u201chave realized nobody is coming\u201d to help them<\/strong> are increasingly turning toward self-generation, a practice that\u2019s likely to support economic activity in 2023, Ballim said.<\/p>\n Standard Bank sees the economy growing 1.3% this year, a full percentage point more than the central bank\u2019s estimate.<\/p>\n While self-generation will alleviate pressure on the grid, it\u2019s unlikely to pose a structural threat to loss-making Eskom\u2019s revenues and sustainability within the confines of a planned debt restructuring, according to Ballim.<\/p>\n The government plans to take over between one- and two-thirds of Eskom\u2019s R396 billion of debt, with details due to be announced in the 22 Febraury budget. If the plan significantly stabilizes the utility\u2019s balance sheet, it can afford some customer losses over the near to medium-term, Ballim said.<\/p>\n \u201cOn the industrial and commercial scale, there will still be plenty of latent demand, and further demand will emerge in the South African economy once we have a stable power supply,\u201d he said. It\u2019s \u201cquite plausible\u201d that supply will stabilize later this year and into 2025, he said.<\/p>\n
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