Eskom resumes load-shedding as generation units break down
Power cuts will have the net effect of scaring away investors
Embattled power utility Eskom announced on Thursday night it would resume load-shedding again, a day after President Cyril Ramaphosa hosted foreign investors and told them SA was ready for business.
The power utility, reeling under a R450bn debt and breakdowns at its power stations, said the stage 2 power cuts would kick in from 10pm. Stage 2 allows for up to 2000MW of the national load to be shed.
In a statement, Eskom said that the reason for the load-shedding was because of power generation units being lost earlier in the day.
“Earlier in the week we communicated to the public that any unexpected shift in generating capacity such as additional unplanned breakdowns and the depletion of our emergency reserves may necessitate the need to implement load-shedding at short notice.
“Today [Thursday] we lost three additional generating units and had to use our emergency reserves in order to meet demand throughout the day,” the statement said.
The power cuts will significantly hurt the economy and frighten investors.
In October Ramaphosa’s economic adviser, Trudi Makhaya, conceded energy security was a significant investment obstacle.
Addressing parliament ahead of this week’s investment conference, which attracted pledges of R371bn, Makhaya told MPs: “No-one can quibble with the idea that it is a significant investment constraint.”
“We used to pride ourselves for our energy as an advantage in terms of investment and now we are in a different position,” she said.
In October, the Special Appropriations Bill was passed by the National Assembly. The bill will give Eskom a R59bn bailout once approved by the National Council of Provinces. In terms of the bill the Treasury will allocate R26bn to Eskom for the 2019/2020 financial year and R33bn for the 2020/2021 financial year. This allocation is in addition to the R23bn allocated in the February budget for 2019/2020 and each year for 10 years, giving a total of R230bn.
But energy analysts and economists argue that the power utility, which Ramaphosa described as “too big to fail” needed much more than money to function efficiently.
The government has proposed unbundling Eskom into three entities: generation, transmission and distribution, a decision that is being fiercely contested by its allies in the tripartite alliance — Cosatu and SACP.
With Matthew Savides