Power cuts crippling SA economy

By Satyagraha Reporters
South Africans are furious over a power crisis in the country which has had detrimental effects on business and householders. The government has warned that the electricity crisis could take years to resolve.

Meanwhile on 16 May the energy summit held by the National Economic Development of Labour Council (NEDLAC) reviewed Eskom’s application for a 60% tariff increase as well as national electricity saving effort. The National Energy Regulator of South Africa (NERSA) is holding public hearings into the price hike. NERSA has received written submissions from the public and other stake holders since the beginning of April on this issue. Eskom will be informed as to whether it will be granted its 60% tariff increase on 6 June.
Cosatu's spokesperson, Patrick Craven says, “We will strongly oppose the tariff increase by Eskom as it will create disastrous circumstances for everybody particularly the poor.” Load shedding has already had an impact on the ability of the economy to retain current jobs and to create more jobs in the future. “We cannot afford any more job losses. Already we have a very high unemployment rate and we cannot see more jobs being lost and the growth of our economy slowing down.”

Reiterating his sentiments, Azar Jammine, director and chief economist at Econometrix said, “The load shedding has slowed down production especially in certain sectors such as the mining industry.” Earlier this year the mining industry threatened to retrench about 23 000 workers due to the electricity crisis when electricity supply to the mines dropped to about 90%. The mining industry has – for the first time in 110 years – had to stop operations at some of the country’s largest mines. It is too dangerous to send miners underground, as Eskom cannot guarantee that there will be power to keep the workings cool or to bring the miners back to the surface. Eskom’s Media Desk says “In order to meet the current electricity challenges, key industrial customers, including mines, have been asked to reduce their consumption by 10% in order to stabilize the national electricity supply system.”

“The load shedding has slowed economic growth. It has the ability to stagnate job creation and the economic and developmental growth as well as causes a greater risk to job losses.” Jammine also warns house holders to be prepared for additional and higher costs should Eskom’s tariff increase be granted. “There will undoubtedly be an increase in general house holder cost. Costs of all the various electrical appliances used around the house will be altered and increased. House holders need to save and try to limit usage where they can to try and curb the impact it will have on their pockets.”        

Small businesses have also suffered with disastrous effects. Retailers have had to close their shops as lighting, air conditioning and security systems stop working during the power cuts. Anil Rampersad a Durban shop owner says, “The load shedding is costing me thousands of rands daily. We have to resort to using candles and gas lamps in the shop and people do not want to shop under these conditions. I loose out on about two hours of trade whenever the power gets cut and in business, time is money.” According to Rampersad he also had to dispose of some of the items in his shop. “Some frozen products had to be thrown away after it went bad because of the power being switched on and off all the time. My equipment in the shop has also started troubling because of this,” he added.
Farmers are suffering from lost working hours, idle equipment and products like milk and meat going to waste as refrigerators go off. The Milk Producers Organisation says the diary industry is losing at least R100-million a month. Food producers predict that the prices of food will go up 10–15% in the next few months, as production gets disrupted by the power shortages. The producers of our staple foods are saying that power blackouts will just raise their costs even more. Diary farmers have had to throw milk away because they can’t keep it cold; this has led to milk shortages in some areas. The country’s milk production each month has dropped by about 20 million litres. As well as losing out on sales, diary farmers have already spent over R240-million on power-support systems, according to Koos Coetzee, an economist for the Milk Producers Organisation. He said milk producers are thinking of suing Eskom.

Cosatu is concerned that Eskom’s ‘load-shedding’ is threatening jobs and livelihoods. “We are concerned about the impact this is having, especially on casual workers,” said Patrick Craven. He said that casual workers are worst hit, as it was not just their wages that go down when the power is off, but their jobs become even more insecure.

Motorists in the major cities have been wasting thousands of working hours in traffic jams – mainly due to power outages. Continued load shedding will have distressing consequences on job levels. If employers cannot meet with production requirements and their over head expenses then they have no choice but to retrench workers. However, Craven said, “We will fight to protect every single job. No job should be lost over this urgent yet resolvable crisis. Employers and the government must realize that as a trade union movement we will take action against any attempts to retrench workers as a response to the crisis.” Craven urged workers who are not represented by a union to join one. “As a union we are here to fight for the rights of the workers. Should jobs be lost then we will take legitimate strike action.”

With winter approaching and the prospect of colder days there will be a greater usage of electricity which will only add to the crisis. However Eskom has been doing scheduled maintenance of its generating units during the summer months in preparation for the expected increase in demand during winter.  In addition, Eskom has steadily been increasing coal stock levels at its power stations to ensure that it has adequate supplies to meet the expected increase in demand.

Eskom produces about 95 percent of South Africa’s electricity supply and is struggling to cope with the country’s rising demand for power. Eskom’s view is that scheduled blackouts remain a threat unless consumers further reduce demand. Eskom Media Desk states “The effectiveness of saving electricity has been clearly illustrated by the system stabilization achieved since February 2008.  If all consumers across the country adopt the same attitude to power saving as shown already, it will significantly reduce the likelihood of load shedding.”

By | 2017-11-09T15:54:41+02:00 May 23rd, 2008|May 2008|