Power cuts cost SA up to R120bn in 2019, research shows

Power cuts by state utility Eskom cost the South African economy up to R120 billion last year and will probably persist for the next two to three years, research by the country’s national science council showed.

The power cuts are one of the biggest challenges President Cyril Ramaphosa is facing as he tries to revive investor confidence in Africa’s most industrialised economy.

Ramaphosa has promised to break up Eskom to make it more efficient, and granted it a series of mammoth bailouts to stabilise its finances, but its coal-fired power plants keep breaking down after years of mismanagement.

The Council for Scientific and Industrial Research (CSIR) urged government to move swiftly to ease regulations governing “self-generation” of electricity by companies and households as a way to minimise power cuts this year.

Other government initiatives, such as giving independent power producers the go-ahead to build new plants, could only help reduce the frequency of power cuts from next year if procurement processes are expedited, or only from 2022 under normal circumstances, the CSIR research showed.

This month, in a speech to business leaders, Ramaphosa promised that he would embrace efforts by businesses and households to generate their own electricity, but his government is yet to follow through with the necessary regulatory reforms.

The CSIR said government should publish determinations to procure more power in the first quarter of this year and talk to existing renewable energy producers about squeezing more electricity out of their plants.

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