South Africa’s Power-Cut Economic Losses Decreased by 83% as Supply Stabilizes

South Africa’s power-cut losses decreased by 83% in the past year due to stabilized supply, with economic impacts dropping to 481 billion rand. Eskom has improved its coal-fired plant operations, but intermittent outages still occur. Electricity Minister warns of system vulnerabilities as additional generation capacity procurement faces delays.

South Africa experienced a significant decline in losses due to power cuts, which decreased by 83% last year as the electricity supply stabilized. According to a report by the Council for Scientific and Industrial Research, the economic impact of outages, known locally as loadshedding, fell to 481 billion rand (approximately $26.7 billion) in 2024, a stark contrast to the record 2.9 trillion rand in 2023.

The nation’s gross domestic product (GDP) was reported at 4.7 trillion rand last year, reflecting a 0.6% increase compared to 2023 figures. This improvement is attributed to the efforts of state utility Eskom Holdings SOC Ltd., which intensified maintenance and implemented strategies to enhance the reliability of its coal-fired power plants, the primary source of electricity in South Africa.

Despite these advancements, Eskom recently reported intermittent power outages this year, which disrupted a period of consistent electricity supply. The utility has resorted to using auxiliary diesel turbines more frequently during peak demand times, as indicated by recent data.

Electricity Minister Kgosientsho Ramokgopa cautioned that the country’s power system remains precarious, as the procurement process for additional generation capacity has faced ongoing delays. Furthermore, the only nuclear power station in the country, once considered Eskom’s most reliable asset, has experienced breakdowns, contributing to the overall concerns about stability in electricity supply.

To further enhance performance, Eskom is focused on improving its power generation fleet, which achieved an average energy availability factor of 60% last year—the highest since 2021. Moreover, with a reported 3% decline in demand throughout 2024, the utility has managed to sustain supply, a trend that is anticipated to persist.

In summary, South Africa’s economy has seen a remarkable 83% decline in losses from power cuts, attributed to improved maintenance and operations by Eskom. While the GDP growth reflects the stabilization of supply, the nation continues to face challenges with intermittent outages and power system vulnerabilities. Ongoing efforts to enhance electricity generation reliability are crucial for the future stability of South Africa’s power supply.

Original Source: financialpost.com