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The SA Daily 12 November 2019

Power cut risk rockets

  • Eskom had to implement Stage Two load-shedding last Thursday, warning of an electricity grid remaining constrained and vulnerable, and adding that load-shedding at any time therefore remains a real, and now also rising, risk.
  • These ongoing power cuts clearly constrain growth in SA’s goods-producing sectors. All of those quarters that suffered severe load-shedding (as measured by the SARB’s electricity intensity index) have seen output growth contract on both a quarterly and a seasonally adjusted basis.
  • Also, demand here and from overseas has been poor, with growth in SA’s goods-producing sectors contracting; growth in the private tertiary sectors has remained relatively stable (see chart below).
  • Eskom’s alarming operational and financial situation needs to be turned around as a matter of urgency by government — for the SA economy, jobs, and other players. Particularly Eskom’s power generation needs to stabilise to ensure adequate power supply for SA.

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