Home South African As SA economy contracts, minister promises no power cuts above Stage 6

As SA economy contracts, minister promises no power cuts above Stage 6

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Newly-appointed Minister of Electricity Kgosientsho Ramokgopa has assured South Africans they will not have to suffer power cuts higher than Stage 6 load shedding.

File picture: Dumisani Sibeko

NEWLY-appointed Minister of Electricity Kgosientsho Ramokgopa has assured South Africans they will not have to suffer power cuts higher than Stage 6 load shedding.

This comes as Ramokgopa continued with his visits to all 14 Eskom power stations across the country to engage with the management, workers and unions on solutions to the ongoing energy crisis.

The minister on Friday and Saturday visited the Ankerlig open-cycle gas turbines (OCGT), the Koeberg Nuclear Power station, and the Palmiet pump station in the Western Cape.

The Palmiet storage is a hydro-electric pump storage scheme which contributes 400MW to the national grid.

“I want to give the South African public the assurance that I don’t foresee us moving to higher stages of load shedding,” Ramokgopa said.

“When I say higher I mean the highest we have been to is Stage 6. When we are there then we will keep running Ankerlig and the peaking power stations to ensure we don’t go to higher stages of load shedding. I foresee a situation where we are in a position not to go higher than Stage 6.”

Eskom this month has been able to reduce, and at some points suspend load shedding for the first time since Christmas as a number of generation units were returned to service.

The power utility implemented Stage 2 load shedding on Saturday and reduced it to Stage 1 in the evening before being suspended during the day on Sunday.

Breakdowns over the weekend were at 14,489MW of generating capacity while 6,190MW of generating capacity was out of service for planned maintenance.

The ongoing energy crisis has wreaked havoc in South Africa’s economic activity, disrupting business operations and damaged investor confidence.

The Steel and Engineering Industries Federation of Southern Africa (Seifsa) on Friday said the energy crisis presented the most significant risk and binding constraint to the economic prospects of the country.

Seifsa undertook to survey 206 of its affiliated members to measure the impact of the energy crisis over a 12-month period from February 2022 to February 2023.

According to Seifsa, the respondents indicated production declines as much as 34.2% as a result of the electricity crisis, with a quarter of companies indicating that they have had to reduce head count in response to the electricity crisis.

At least 79.2% of companies indicated that they have had to install alternative electricity sources in the last 12 months with a combined value of R985 million to counter the pressing challenge presented by the electricity crisis.

On a weighted average basis, companies have indicated increases to monthly operating costs to the extent of 24.9% from the extensive use of generators.

Last week, the International Monetary Fund (IMF) slashed South Africa’s 2023 growth forecast from 1.2% to 0.1%, mainly due to a significant increase in the intensity of power cuts, as well as the weaker commodity prices and external environment.

The IMF said restoring energy security will require attracting private sector participation in the electricity market and addressing Eskom’s operational and financial deficiencies.

Investec chief economist Annabel Bishop on Friday said South Africa’s economic growth outlook has tipped lower on the deepening energy crisis which is expected to limit 2023’s GDP growth to 0.2%.

Bishop on Friday said economic growth in the first quarter of 2023 is likely to contract further by 0.5% following 1.3% negative growth in the fourth quarter of 2022, which will yield a technical recession as load shedding cuts into productive capacity.

“South Africa’s energy crisis is having a severely suppressing effect on growth and job creation, and shows little immediate likelihood of being resolved, reducing business and consumer confidence, and further weakening the growth outlook,” Bishop said.

“South Africa is taking a very tardy approach to the resolution of its energy crisis, with no urgent plans for a substantial increase in the power supply in the short-term, and energy experts expect load shedding to persist daily this year, worsening over winter.”

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