South Africa’s economic losses from power cuts dropped 83% to 481 billion rand due to improved supply by Eskom. The reported GDP increased by 0.6% to 4.7 trillion rand. However, the electricity supply system remains vulnerable with intermittent outages and ongoing challenges in generation capacity.
According to a recent report by the Council for Scientific and Industrial Research, South Africa’s economic losses due to power cuts, locally termed as loadshedding, decreased by 83% in the past year as power supply improved. Specifically, the economy lost 481 billion rand (approximately $26.7 billion) in output, down from the staggering 2.9 trillion rand loss experienced in 2024 during peak outages. The nation’s gross domestic product reached 4.7 trillion rand, representing a 0.6% increase from 2023.
This reduction in power cut losses can be attributed to the state utility, Eskom Holdings SOC Ltd., enhancing maintenance efforts and improving the reliability of its coal-fired power plants, which constitute the majority of the country’s electricity supply. Despite these advancements, Eskom has implemented intermittent outages in the current year, indicating that a prolonged period of stable electricity has been interrupted. Additionally, the utility has begun to utilize auxiliary diesel turbines more frequently to meet peak demand.
Electricity Minister Kgosientsho Ramokgopa has cautioned that the power system remains fragile due to ongoing delays in acquiring additional generation capacity. The sole nuclear power station in the nation, once seen as the most dependable facility, has encountered breakdowns, further straining the electricity supply. Nevertheless, Eskom aims to enhance its performance, which recorded an average energy availability factor of 60% last year, the highest since 2021. A noted 3% decrease in demand in 2024 contributed to more stable supply, a trend that is described as continuing.
In summary, South Africa’s economy has significantly benefited from a reduction in power cut losses, declining from 2.9 trillion rand to 481 billion rand due to improved power supply management by Eskom. While stability appears to have improved, challenges remain, including the urgency to increase generation capacity and address breakdowns in critical infrastructure. Eskom’s efforts to enhance reliability are essential for sustaining the current recovery and economic growth.
Original Source: financialpost.com
