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Eskom: One Simple Line Graph to Make You Sh!t Youself

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This year has been the one with the highest amount of loadshedding that South Africans have ever seen.

In fact this year is on track to be the one year in which loadshedding hours exceeds ALL the years before. From 2015 to end of 2021 we had a total of 3 505 hours of loadshedding, whilst 2022 up to 7 December 2022 had the dubious distinction of 3 486 hours of load shedding.

Despite more than R450 billion spent on the Kusile and Medupi power stations, and the rise of sustainable power sources, South Africa’s ability to generate electricity has declined by 10% over the past decade. And now the rush by individual consumers to install renewable energy solutions such as Solar Panels and Tesla Powerwalls continues apace.

Just how much does loadshedding cost South Africa?

According to Chris Yelland, load shedding costs SA approximately R1 billion per stage, per day. Those Stage Four blackouts cost about R4 billion for each 24 hour period. That’s more than the national police service receives every year from government.

In 2015 Yelland stated: The cost to the economy during stage 1 load shedding – 10 hours of blackouts per day for 20 days a month – is R20 billion per month. Stage 2 load shedding, using the same time parameters, costs the economy R40 billion per month, while stage 3 is estimated to cost SA R80 billion per month.

Investec’s Annabel Bishop says it’s even more dire than that – she estimated that it could have cost South Africa R2.4 trillion by the end of 2019’s first quarter, which is half of SA’s GDP, according to The South African.

Dr Francois Stofberg, senior economist at the Efficient Group, said; “A few years back we set out to estimate the economic cost of load shedding in South Africa. Because our focus was purely on the economic side, we excluded the social costs associated with load shedding, which would, of course, have inflated our findings. Nevertheless, our conservative back-of-the-envelope estimates showed that South Africa’s economy was between 8% and 10% smaller than it could have been if we were not plagued by Eskom’s inefficiencies and inadequacies.”

In today’s terms, after Statistics South Africa adjusted the country’s gross domestic product (GDP) figures earlier in 2021, the economy would, therefore, have been between R360 billion and R450 billion larger, after adjusting for things such as inflation.

Bu the actual cost of load shedding is growing at an exponential rate, which means that it is difficult to accurately calculate.

Stofberg explained; “The reason for this is because of the compounding nature of economic growth; it is growth on growth. Put differently, more growth leads to even more growth, or less growth leads to even less growth. So, if one measures the cost of load shedding from an initial point, and load shedding persists, then the 8% to 10% reduction in the size of the economy can quickly become 10% to 12%, 15% to 17%, and so on.

In 2021, the Western Cape province’s minister of finance and economic opportunities David Maynier said that the latest round of power cuts had cost the country billions of rands.

“With load shedding costing South Africa’s economy R500 million per stage, per day, and the Western Cape’s economy R75 million per stage, per day, over the last two weeks load shedding has cost the South African economy approximately R25 billion, and the Western Cape approximately R3.85 billion,” he said.

In January 2020 the CSIR released a report stating that the total economic impact of load shedding in South Africa could be as high as as R338 billion over the past 10 years which had 1509 hours of loadshedding, according research from the Council for Scientific and Industrial Research (CSIR).

Extrapolating the CSIR’s estimates for 2020/2021 1nd 2022 paints a VERY GRIM PICTURE as those numbers indicate that the total loss to the economy are far in excess of the R338 Billion for the ten years up to end 2019. We had 5 482 hours of loadshedding from 2020 to 2022 in contrast to the 1509 hours of loadshedding in the 10 years prior to 2020.

SO, if the CSIR’s figures are correct, then the total cost to the South African Economy due to loadshedding is now closer to R1 227 Billion or R1.2 Trillion!

OR

IF Investec’s Annabel Bishop’s figures are correct then the total cost to the economy to date from the effects of loadshedding is around R9.6 Trillion.

Loadshedding Timeline:

2007 – Eskom introduces load shedding: Former president Thabo Mbeki admits Eskom was correct in stating its decreasing capacity and that the government has neglected to attend to the crisis sooner. South Africans from schools, formal and informal businesses and households are hit by rolling blackouts.

2008 – Load shedding continues – Eskom is unequipped: The National Energy Regulator of South Africa (NERSA) states that Eskom is unequipped & underdeveloped to handle South Africa’s fast growing economy.

2013 – After a 5 year break, load shedding returns: Diminished stockpiles of dry coal at some plants are to blame. 3 generating units in Mpumalanga at Kendal power station are continuously tripping.

2015 – 99 Days of load shedding ensue: Despite former Eskom CEO Brian Molefe declaring that there’d be an end to load shedding, the country experiences 99 days of regular blackouts. The economy is hit hard, and the GDP is slowed. Molefe then unveils his new strategy, which focuses on maintenance and better management.

2016 – Former president Jacob Zuma states load shedding will no longer be a problem: Former president Jacob Zuma tells staff at Eskom’s Sunninghill headquarters that blackouts would no longer be an issue. He refers to a detailed report on how Eskom will eliminate the need for load shedding.

2018 – Gordhan warns of electricity cuts: South Africa is reintroduced to rolling blackouts as stage 1 and 2 load shedding commences. Minister of Public Enterprises Pravin Gordhan says Medupi and Kusile power plants have experienced design flaws, which are affecting the production capabilities.

2019. March – Load shedding jumps from stage 2 to stage 4: The power utility makes a quick jump from stage 2 to 4 load shedding. March sees blackouts lasting for weeks. Gordhan apologizes publicly, blaming the power cuts on plant breakdowns. President Cyril Ramaphosa says that R69 billion will be allocated to aiding the state utility. The Zondo Commission of Inquiry continues to investigate allegations of state capture and laundering of state resources at Eskom.

2019, December – Both Gordhan and Mabuza speak out about load shedding: South Africans now face stage 6 load shedding after a long week of blackouts that have affected countless households and businesses across the nation. Heavy rainfall and a problem at the Medupi power plant are to blame. In an interview with eNCA, Eskom chairperson and acting CEO Jabu Mabuza said: “I don’t think we’re failing. I think some of the reasons we find ourselves is mainly the unreliability of the plant owing to maintenance not being done. The situation we find ourselves today is to make sure it’s controlled load-shedding. Stage 6 is not a calamity. It’s controlled to protect the system from total blackout.”

2020 – Load shedding continues: Stage 4 load shedding is initiated in March 2020 when the Koeberg Nuclear power station experiences technical difficulties, because one of the sea water cooling pumps failed.

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.