South Africa Faces Sixth Day of Blackouts as Eskom Stumbles

JOHANNESBURG (Capital Markets in Africa) – South Africa’s state-owned power utility will implement controlled blackouts for a sixth straight day to prevent a total collapse of the electricity grid amid a shortage of capacity.

Eskom Holdings SOC Ltd. is racing to bring generating units back online after suffering outages last week that were compounded by a loss of power imports from neighboring Mozambique as a result of a cyclone. The staggered power cuts, aimed at reducing demand pressure on the grid, are crippling businesses and leave roads gridlocked in cities throughout Africa’s most-industrialized economy.

Eskom, which supplies almost all the power in South Africa, will cut 4,000 megawatts of supply from 9 a.m. until 11 p.m. on Tuesday after doing the same on Monday. It will shift to so-called stage 2 — cutting 2,000 megawatts — overnight Monday.

The utility is seen as one of the biggest risks to the country’s economy, burdened by operational and financial woes stemming from years of mismanagement and massive cost overruns on two new coal-fired power stations that should have been completed in 2015.

Round the Clock
South Africa’s mining industry faces risks sending workers underground when the electricity supply is unstable, said Shaun Nel, a spokesman for the Energy Intensive Users Group of South Africa. The group’s members consume more than 40 percent of the nation’s power and include Anglo American Plc. Smelters also “can’t come on and off so quickly, so companies are switching them off completely,” he said.

The utility had planned to replenish water and diesel supplies typically used for peak generation over the weekend, however power cuts were increased after the cyclone that struck Mozambique ended its electricity imports. It’s not likely they’ll resume over the next few days, according to Eskom.

Maintenance teams “are working round the clock to return generation units to the electricity system,” the Johannesburg-based producer said in an emailed statement. The cuts are “no cause for alarm as the system is being effectively controlled,” it said, adding that during stage 4 load-shedding, about 80 percent of the nation’s demand is being met.

Source: Bloomberg Business News