Eskom ramps up blackouts to highest level ever, increasing recession risk for SA

In an unprecedented move, state-owned power utility Eskom said on Monday rolling blackouts would be increased to their highest level yet. 

Eskom, which has been described by economists and ratings companies as the biggest risk to the economy, said in a Twitter post it would cut 6,000MW from 6pm after technical problems at Medupi, one of the new mega-power stations that were supposed to alleviate SA’s tight electricity supply system.

SA, which first experienced power cuts about a decade ago just before the outbreak of the global financial crisis, has never introduced schedule 6 load-shedding before.

Medupi and Kusile have been dogged by cost and time overruns. In addition to putting Eskom in financial distress, failure to get the power stations on stream has led to bouts of power cuts that helped push the economy into its current dire state.

The utility, which less than two weeks ago said it wasn't expecting load-shedding, has implemented rolling power cuts over the past five days due to breakdowns at its power stations.

The latest round of load-shedding started just days after a shock report showed the economy contracted 0.6% in the third quarter. With the outlook for the fourth quarter already bleak, the latest power cuts increase the risk that the economy will slip into a recession.

Within a few minutes of the announcement, the rand had weakened 0.68% to R14.6787/$. Prior to the news, it had been 0.4% firmer at R14.57.

Late on Monday Eskom downgraded load-shedding from stage 6 back to stage 4, which is a cut of 4,000MW. The utility said in a social media post that stage 4 will last from 10pm Monday to 11pm Tuesday.

With Andrew Linder