Shock load shedding forecasts for South Africa
Load shedding in South Africa increased by 38% in 2021 with more than 2,400 gigawatt hours (GWhs) shed, says professional services firm PwC.
This is the equivalent of an estimated 1,136 hours of power outages – equal to three hours per calendar day, the group said in a research note this week.
Based on these figures, PwC estimates the adverse impact of load-shedding in 2021 was a reduction in real GDP growth of up to 3.1 percentage points, costing the economy up to 400,000 potential jobs.
“According to the Presidency, South Africa has a shortfall of around 4,000MW of electricity generating power. It is possible that this shortfall is significantly larger given that Eskom’s energy availability factor (EAF) was revised downward from 72% to 63% in its latest Medium-Term System Adequacy Outlook (2022-2026),” PwC said.
Looking ahead, Eskom chief executive Andre de Ruyter said recently the power utility expects 29 days of load-shedding during February and March and a total of 61 days during the April-August period.
In both cases, this suggests load shedding every third day, PwC said.
“A country’s power system should supply cost-effective electricity to customers in an efficient, reliable, and sustainable manner.
“Not only does this underpin economic activity, but it also contributes towards increased economic growth through levers such as lowered costs of production and other services, increased investor confidence, country competitiveness, and improved living standards.”
Revised framework
According to research by the University of Cape Town (UCT), a revised regulatory framework could enable at least 450MW of the required 4,000MW shortfall to be available immediately, with a further 4,000MW coming online over the short to medium term.
In the short term, the private sector could take advantage of the new 100MW generation exemption threshold, PwC said.
“However, a major stumbling block is a lack of clarity on the degree to which private firms are allowed to wheel to multiple customers and trade excess power. This uncertainty is preventing potential investors from spending money as it could put commercial viability at risk.
“Clarity and guidance on the licensing processes and requirements are also needed for private firms to embark on large scale power projects.”
Read: Massive new solar power plant to be built in South Africa by 2023