Load-shedding costs South Africa up to R899 million each day

According to central bank estimates, South Africa’s energy problem costs the economy up to 899 million rand ($51 million) every day.

Rolling blackouts lasting 6 to 12 hours a day, or so-called stage 3 and stage 6 outages, cost the economy between 204 million and 899 million rand per day, according to the South African Reserve Bank in an emailed response to inquiries on Monday.

When state-owned corporation Eskom Holdings SOC Ltd.’s elderly and badly maintained coal-fired facilities can’t meet demand, power cutbacks, known locally as load shedding, are required to keep the grid from collapsing.

According to Bloomberg calculations, the firm, which produces virtually all of South Africa’s energy, has enforced stage 6 cuts, the most severe yet, for 10 days this year.

The Reserve Bank reduced its economic growth prediction for this year to 0.3% from 1.1%, with Governor Lesetja Kganyago claiming that power outages will reduce production growth by 2 percentage points.

It forecasts that electricity would be rationed for 250 days in 2023, a record if achieved.

While power outages have been a problem in the nation for almost 15 years, Africa’s largest industrialised economy is currently undergoing its worst spell of power rationing yet, with cutbacks scheduled for more than 200 days in 2022 and every day this year.

As Eskom overhauls its electricity-generating fleet, blackouts are expected to last at least another two years.

Eskom has said several times that an additional 4,000 to 6,000 megawatts of energy generating capacity is required to halt load-shedding.

In his state of the country speech on Thursday, President Cyril Ramaphosa is expected to outline steps to solve the problem.

The country’s National Energy Crisis Committee was proposing a new law to expedite plant building in January. The corpse is escorted from the president’s office.