South Africa has had an advantage over many other African countries having attained almost universal access to electricity. However, the ongoing power outage (locally referred to as load-shedding) crisis, has put an enormous dent in the local economy having had ongoing power outages for a period of over 15 years since the end of 2007.
The outage crises developed as a consequence of frequent breakdowns at the national utility, Eskom’s aging power generation units as well as poor management and corruption, that had drained Africa’s largest power producer of funds much needed to address maintenance issues and new power unit builds. In the last decade the situation had worsened with 2023, achieving the worst year on record, with more than 280 days of power outages recorded
On Monday, 26 August 2024, Eskom provided its outlook for the summer period, commencing 1 September 2024 to 31 March 2025. This followed a much improved period of performance, following five months (152 consecutive days) without load-shedding occurring.
Dan Marokane, Eskom Group Chief Executive, in his address said that “As Eskom enters a competitive electricity market, it has not only delivered a winter free of load-shedding, but it has done so by being efficient and saving over R10 billion in diesel spend that will be a strong driver to a possible return to profit in our current financial year (FY25). This outcome has led to predictions suggesting ongoing performance can contribute to potential growth in the economy of around 2%,”
Eskom aims to add approximately 2 500MW of generation capacity by January 2025 through meticulous implementation of recovery plans. The Koeberg Nuclear Power Station Unit 2 is also expected to return to service from a long-term outage in December 2024, bringing 930MW to the grid. Furthermore, the Kusile Unit 6 will finally be synchronised for the first time into the grid in December 2024, adding 800MW of capacity. The return of Medupi Unit 4 from an extended outage period will according to the Eskom statement, add another 800MW before the financial year-end.
Key Performance Highlights
• A winter without planned power outages: There was zero load-shedding during the 2024 winter period, compared to 153 days of load-shedding in the 2023 winter season.
• Positive impact on economic outlook and profitability: Potential ~2% growth for the South African economy and improved financial performance for Eskom in financial year 2025 (1 April 2024 to 31 March 2025)
• Reduced Unplanned Capacity Loss Factor (UCLF): UCLF averaged at 12 400MW in 2024 winter, reaching a 12-month low of 11 300MW in July 2024. This marks a 20% improvement and is 3 100MW better than the 15 500MW likely scenario in the 2024 Winter Outlook.
• Enhanced reliability through increased planned maintenance: Eskom surpassed its planned maintenance target of 3 677MW, achieving an average of 4 799MW during winter 2024 – a notable improvement over the past two years.
• Sustained increase in Energy Availability Factor (EAF): The EAF rose from 57.00% in April 2024 to 67.02% by the end of July 2024 – a significant improvement of 10.02%.
• Reduced reliance on Open-Cycle Gas Turbines (OCGTs) and diesel cost savings: Decreased dependence on OCGTs resulted in a 74% reduction in diesel costs, saving over R10 billion compared to the same period last year.
One of the most damaging consequences of the long period of power outages has been the effect on slowing economic growth and of even greater concern is the effect that this has had on the labour market. Unemployment is currently at an all-time high level of over 35% and beyond ensuring a secure power supply, government will also have to address the affect this has had on employment.
