South Africa’s electricity crisis is costing the economy up to R899 million a day, according to central bank estimates.
Rolling blackouts of about 6 to 12 hours a day, or so-called stage 3 and stage 6 blackouts, take between R204 million and R899 million out of the economy daily, the Reserve Bank of South Africa said in an emailed response to questions on Monday.
Load shedding is necessary to protect the grid from collapse when Eskom’s old, poorly maintained and mostly coal-fired plants cannot keep up with demand.
The company, which produces nearly all of South Africa’s electricity, has imposed Stage 6 outages, the most severe yet, for 10 days so far this year, according to Bloomberg calculations.
The Reserve Bank cut its economic growth forecast for this year to 0.3% from 1.1%, and Governor Lesetja Kganyago said power outages will cut output growth by 2 percentage points. He predicts that electricity will be rationed for 250 days in 2023, which if it comes to fruition will be a record.
While blackouts have plagued the country for around 15 years, South Africa is now experiencing its worst power rationing yet, with blackouts lasting more than 200 days in 2022 and every day this year. Blackouts are likely to continue for at least two more years as Eskom reviews its power generation fleet.
Eskom has repeatedly said that an additional 4,000 to 6,000 megawatts of electricity generation capacity is needed to end load shedding.
President Cyril Ramaphosa is expected to announce measures to address the crisis in his state of the nation address on Thursday. In January, the country’s National Energy Crisis Committee was planning a new law to speed up plant development. The body is found outside the president’s office.
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