Power crisis eases after Eskom rushes to fix plants

South Africa’s energy crisis eased as Eskom scrambled to repair broken plants and supplemented supply using gas turbines and pumped-storage facilities.

Power cuts should be limited to 2GW on Wednesday — down from a peak of 6GW on Monday — and are expected to end next week, Eskom said in an e-mailed statement. The outages temporarily interrupted production at several mines, disrupted mobile phone services and weighed on the rand.

“As the generating plant continues to perform at low levels of reliability, any unexpected shift, such as an increase in unplanned breakdowns, could result in a change in the load-shedding stage at short notice,” Eskom said. “We continue to ask customers to reduce demand.”

The rand gained for the first day in three, advancing 0.3% to R14.75/US$ by 10.10am. Eskom, which supplies 95% of the power used in South Africa, has struggled to meet demand since 2005, due to its failure to properly maintain ageing plants and invest in new ones. The latest round of outages were caused by simultaneous breakdowns at several facilities and were exacerbated by heavy rains that caused flooding and soaked coal stockpiles.

President Cyril Ramaphosa cut short a trip to Egypt to deal with the crisis, and was briefed by Eskom’s management on Wednesday on what it is doing to address the supply deficit.

The South African Chamber of Commerce and Industry, the country’s largest business group, said the effect of the outages were already devastating.

Many complaints

“We have received many complaints from businesses in the retail and other manufacturing sectors not being able to fulfil production schedules on sales orders during this critical period,” the chamber said. “The government’s promised plans in revitalising the economy by building infrastructure and driving policies for industrialisation will now come into question as energy is the biggest enabler for any of these plans to come to fruition.”

While Ramaphosa has repeatedly said that Eskom is too big to fail, the government is now considering how to tap additional sources of power and reduce the nation’s reliance on the utility, Ramaphosa’s spokeswoman, Ramaphosa’s spokeswoman Khusela Diko, said in an interview with SAfm.

“The biggest problem that the president has raised has been the fact that looking at Eskom, it really is holding the country to ransom,” she said. “The president has held that we need to look at some of these regulatory blockages and changes that need to be made to allow for additional generation capacity.”  — Reported by Mike Cohen and Amogelang Mbatha, with assistance from Paul Vecchiatto, (c) 2019 Bloomberg LP