South Africa’s Power-Cut Losses Reduce by 83% Amid Supply Improvement

South Africa’s 2024 economic losses from power cuts dropped by 83%, amounting to 481 billion rand. This decline followed Eskom’s improvements in coal plant reliability. However, the electricity system remains vulnerable due to delays in new generation capacity, and intermittent outages continue to occur.

South Africa’s economy experienced a significant reduction in losses from power cuts, decreasing by 83% last year, as reported by the Council for Scientific and Industrial Research. The country’s output loss due to outages, termed loadshedding, dropped to 481 billion rand ($26.7 billion) from a previous high of 2.9 trillion rand in 2024 when blackouts were at their peak. In 2024, the gross domestic product rose to 4.7 trillion rand, reflecting a 0.6% increase from 2023.

This decrease in power outage costs is attributed to improved maintenance and operational measures implemented by Eskom Holdings SOC Ltd., the state utility. These actions have enhanced the reliability of coal-fired plants, which produce most of South Africa’s electricity. However, the nation has witnessed intermittent outages as Eskom continues to face challenges.

Despite these improvements, Electricity Minister Kgosientsho Ramokgopa cautioned that the power system remains vulnerable due to procurement delays for new generation capacity. Additionally, South Africa’s only nuclear power station, which used to be a reliable source, has also experienced failures.

Eskom is focused on further enhancing its fleet performance, achieving an average energy availability factor of 60% last year, the best level since 2021. This improvement coincided with a 3% reduction in demand during 2024, assisting the utility in maintaining electricity supply. Demand patterns continue to decline, according to Eskom’s data.

South Africa has made notable progress in reducing the economic impact of power cuts, with an 83% drop in losses attributed to improved supply from Eskom. However, challenges remain regarding the reliability of electricity generation, signaling ongoing vulnerabilities in the power system. Continued focus on maintenance and expansion of generation capacity is crucial for sustained stability.

Original Source: financialpost.com