Load shedding: 14 years later and it just gets worse

Load shedding has been with us for 14 years and it just gets worse, with another projected five years of living in the dark at short notice. It does not only affect current production, which can at least be measured, but also makes investors think twice about investing in a country with frequent load shedding. This loss cannot even be measured.

Prof. Jannie Rossouw from the Wits Business School says Eskom should change its head office name from Megawatt Park to Kilowatt Park and stop acting all high and mighty as if they are above the rest of the country.

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“We do not trust Eskom. It can start earning our trust by publishing all its contracts for public scrutiny. Then we can see who gets paid how much. Mr De Ruyter your suppliers are cheating you and Eskom looks like it has too much to hide,” he says.

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Load shedding’s long-term consequences even worse

Rossouw says while production has to stop due to load shedding and money is lost this way, he is more worried about the secondary consequences of investors deciding not to invest in South Africa due to load shedding.

“We can never measure this loss of opportunity cost, while current investors still make plans to work around load shedding. Current investors will also put further development and investments on ice.”

He is also not impressed with Minister of Energy Gwede Mantashe, and would not be surprised if the current load shedding is aimed at making the public beg for the power ships to come.

“When he looks excited about something, such as the power ships, you must know he has his own agenda and that agenda is all about himself and not the people of the country.”

ALSO READ: Polls closed, darkness returns: Eskom warns of load shedding ‘at short notice’

Businesses and consumers cannot handle load shedding now

Economist Mike Schűssler says load shedding is a massive problem now because consumers and businesses have very little reserves left, with consumers hardly able to afford electricity prices and fuel.

“Consumers’ salaries did recover 90% of the losses of the second quarter of 2020, but a real after-inflation increase later, we are back to the same levels in after-tax money as in 2016. With consumers in such a weak position and confidence still low after some recovery after the hard lockdowns, the massive load shedding is knocking the life out of the consumer.”

Schűssler says businesses are looking at survival, with the exception of mining and agriculture that are fetching very good prices on international and local markets.

“Without mining and agriculture, South Africa would have been on its knees. As these two sectors are buying new equipment and doing maintenance, it is helping many other sectors as well.”

Tourism does not need that much power but is still weak due to the pandemic. He says small and medium businesses in particular do not know where to turn to, as investment in the country outside of renewable energy is basically on hold.

“Local businesses are hesitant to invest due to their experience of load shedding. Foreign investors see this and also put their projects on hold. This means no job creation and in fact we are probably bleeding jobs again. This makes consumers weary too.”

ALSO READ: Busa rejects calls for Eskom’s management to step down over load shedding

This is how much load shedding is costing the economy

According to Schűssler, every hour of load shedding is a loss of between R18 and R22 million for each stage of load shedding, which means that stage two load shedding costs the economy between R36 million and R44 million.

“A day of loadshedding on stage one can mean a loss of R432 to R528 million and the R5 trillion South African economy can handle it and even three or four days will not be too much of a problem. However, a week at stage four hurts and small businesses struggle and lose hope.”

The problem is that a few weeks of load shedding at different stages has knock-on effect that just gets bigger. The other problem is that there is no end in sight, he says.

ALSO READ: Load shedding: Eskom will ‘destroy economy, increase unemployment’

No end in sight for load shedding

“The politicians have left the building too and they helped to cause the problem. They allowed BEE miners to increase coal prices with 300% over 10 years. They helped build the new power stations and Chancellor House that belongs to the ANC made money and was a leader in the corruption game. Now, no one is to be found who can give real leadership and everyone sees they have no backbone.”

He says businesses and consumers are worried but some ‘hot air types’ are ruling this debate by blaming current management and our leaders debate whether we should go with renewables or not.

“We need power first. Losing 5% of our economy at least per day at stage two should be a wake-up call, but they would rather hide or say things everyone knows is not true.”

ALSO READ: Will load shedding get better? It doesn’t seem likely

Time to be honest about load shedding

It has been 14 years since South Africans experienced load shedding for the first time and Schűssler says it is now time to be honest and tell people to pay up. It is time to be honest and lock up the crook who stole from us. It is time to tell people we are losing jobs and time to get the private sector involved and not some BEE buddy who is going to make power even less affordable, he says.

“It is time to allow other businesses to build their own power stations and if they want, sell it back into the grid at a price people can afford. We knew that this was going to happen in the late 1990s We have had load shedding since end 2007. Still, it gets worse. Fourteen years lost and still no real end in sight.”