Load shedding costs Western Cape up to R12bn

Load Shedding Source: Google Images

Load shedding has been put on hold this weekend, but the Eskom crisis could lead to an economic meltdown, warn experts.

The power utility has given no assurances, saying the “reprieve” was due to a low demand for electricity during weekends.

The current stage 4 load shedding was largely attributed to diesel supply constraints and poor performance of power generation plants including the new ones, Medupi and Kusile.

Acting group executive for power generation Andrew Etzinger said Eskom utility had made it clear in December that maintenance carried out at the plants would take up to 18 months and the problems facing Eskom would not be resolved “overnight”.

“We attended to all plant-related problems in December, we carried out a lot of maintenance, but not nearly enough. At least now the stockpile levels were raised to about 30 days. But we are still vulnerable to load shedding,” Etzinger said.

He said a team of internal maintenance engineering staff was busy attending to the problem, but in the long term, the utility’s capabilities should be boosted in terms of skills as there was a gap.

“My focus for now is to get generators back on line as soon as possible.”

Eskom spokesperson Khulu Phasiwe said the company had no evidence of sabotage, as had been suggested by some parties earlier this week.

The Western Cape Department of Economic Development said although the impact of load shedding on the economy had yet to be quantified, the crisis had put the province in a vulnerable position.

“Some figures suggest a cost per month to the South African economy of between R20 billion and R80bn. The cost to the Western Cape could therefore be between R3bn and R12bn per month, of multiple days of load shedding,” Economic Development MEC Beverly Schäfer said.

She said although the impact was felt by businesses across the board, it might be hardest for small businesses to absorb.

“There are also other additional costs on our economy – like the potential loss of investment as investors look to invest where there is energy security. We’ve also seen in recent days the impact of load shedding on the rand, which has a further economic impact.

“The economy cannot be allowed to fail and we must make it easier for Eskom to succeed,” said Schäfer.

Ronald Chauke, energy portfolio manager for the Organisation Undoing Tax Abuse , called on the government to take decisive action urgently as the Eskom crisis could lead to “economic meltdown”.

Some of the “bold” decisions that he suggested could be taken included securing the required expertise and skills, employing robust leadership at executive and board levels and taking action to stop corruption and recoup the money.

“We are in a serious crisis and we need to move with speed to resolve the crisis. However, the situation cannot just be left to Eskom to resolve. The government is a shareholder and so are citizens through civic organisations. There has to be dialogue among the stakeholders which will lead to action.”