South Africa Imposes Blackouts to Save National Grid

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 11-Feb-2019

South Africa’s struggling state power monopoly imposed its severest level of rolling blackouts on Monday to prevent the collapse of the national grid. Eskom, which generates nearly all of the electricity for Africa’s most industrialised economy, said that it had cut 4,000 megawatts from the power supply after it “unexpectedly lost six additional generating units” to breakdowns.

The decision came just days after President Cyril Ramaphosa outlined a contentious plan to break up the utility. Mr Ramaphosa launched an overhaul of Eskom soon after replacing Jacob Zuma, under whose presidency the utility was a byword for corruption and waste.

The “stage four load-shedding” underlines the troubles of Eskom, which is buckling underneath more than $30bn of debts, falling revenues and a failure to replace ageing power stations. Eskom is already running far short of its official capacity of 45,000MW of electricity, with the latest blackouts implying that it is straining to meet even low summer demand.

Eskom has been dogged in particular by overruns at expensive new coal plants. If sustained the blackouts could throttle smelters, mines and other industrial consumers and weaken an economy that briefly fell into recession last year.

On Monday Mr Ramaphosa called this round of load-shedding as “quite a shock . . . most worrying, most disturbing”. The president admitted in a state of the nation address to parliament last week that “Eskom is in crisis and the risks it poses to South Africa are great”. He has previously said that Eskom was “too big to fail” given the damage that its mostly state guaranteed debts would inflict on public finances if they imploded.

A budget this month will detail plans for a financial rescue, which may include a cash injection or the government’s takeover of a portion of the debts.

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