The cost of power cuts to South Africa’s economy fell by 83% in the past year, dropping to 481 billion rand from 2.9 trillion rand in 2024. This is attributed to improvements in the maintenance of Eskom’s coal-fired plants. Despite these advancements, the situation remains delicate, with intermittent outages continuing and future capacity procurement facing delays.
According to a recent report from the Council for Scientific and Industrial Research, the economic losses incurred from power cuts in South Africa decreased by 83% last year, indicating a stabilization in electricity supply. The economy suffered a loss of 481 billion rand (approximately $26.7 billion) due to power outages, known locally as loadshedding, significantly down from 2.9 trillion rand in 2024, which was marked by record blackouts.
Gross domestic product (GDP) rose to 4.7 trillion rand last year, reflecting a 0.6% increase compared to 2023, as stated by the national statistics agency. This improvement in the economy’s output is attributed to enhanced maintenance efforts by the state utility, Eskom Holdings SOC Ltd., which has focused on boosting the reliability of coal-fired power plants that generate the majority of the country’s electricity.
Despite improvements, Eskom has implemented intermittent outages this year, suggesting that the situation remains precarious. The utility’s data indicates increased reliance on auxiliary diesel turbines to meet peak demand. Electricity Minister Kgosientsho Ramokgopa acknowledged the vulnerabilities in the current power system, primarily due to delays in securing additional generation capacity.
Furthermore, the nation’s only nuclear power station, previously seen as a linchpin of Eskom’s operations, has also experienced breakdowns. Eskom is working to enhance its fleet performance, which achieved an average energy availability factor of 60% last year, the highest since 2021. A noted decrease in electricity demand of 3% during 2024 has contributed to better maintenance of supply, demonstrating a downward trend in demand overall.
In summary, South Africa has significantly mitigated the economic impact of power cuts, with losses decreasing by 83% last year. The success is largely due to improved maintenance of electricity supply infrastructure, although challenges persist, particularly concerning the reliability of Eskom and ongoing vulnerabilities within the power system. The steps taken toward stabilizing electricity supply have been pivotal in fostering economic growth, as evidenced by a slight increase in the GDP.
Original Source: financialpost.com
