Over the past five weeks data from Eskom and economic indicators have started pointing to an easing in SA’s electricity crisis that has been a drag on growth since 2022.
As the electricity supply from Eskom begins to stabilise, the focus has shifted to the causes of power cuts at municipal level, which the minister of electricity Kgosientsho Ramokgopa on Monday described as “acute”.
Ramokgopa told journalists the return to service of about 4,400MW of generation capacity (equal to about four stages of load-shedding) had seen the level of unplanned breakdowns at power stations — one of the causes of load-shedding — drop to some of the lowest levels in about two years.
The generation capacity out of service due to breakdowns was sitting at 11,000MW on Sunday, compared with 18,000MW at the same time last year.
The energy availability factor (EAF) for the generation fleet — a measure of generation performance compared with total installed generation capacity — improved to 59% year to date since the start of Eskom’s financial year on April 1. The EAF for the same period last year was 53%.
Eskom has also been able to reduce its reliance on its expensive diesel-powered emergency generation fleet. Total expenditure on diesel to run the open-cycle gas turbines was down about two-thirds from R3.1bn in April last year to R1.15bn this April, Ramokgopa said.
Despite 40 consecutive load-shedding-free days, many South Africans are still facing frequent and sometimes prolonged outages due to breakdowns at the local distribution level, which is managed, in many areas, by municipalities.
The National Infrastructure Development Plan 2050 (NIP 2050) produced by Ramokgopa while he was head of Infrastructure SA cautioned that if there was “continued underinvestment, or no investment” in the distribution infrastructure owned by municipalities SA was likely to “run into a major problem of this infrastructure collapsing”, he said.
The phase two NIP 2050, gazetted in September 2022, focused on distributed infrastructure such as human settlements, municipal water, electricity and sanitation services. Phase one focused on bulk energy, water, freight transport and telecommunications infrastructure.
The phase two report said that “the reliability of the [electricity] distribution network is a serious concern in many municipalities, including major metropolitan areas, secondary cities, towns and rural areas”. It estimated the backlog in “asset rehabilitation”, or maintenance, was growing at R2.5bn a year, with a total backlog at the time of more than R32bn.
“We produced this report more than 18 months ago and at the time we projected that SA would start seeing [distribution network collapse] happen in large measure by 2025. “It has come much earlier than anticipated,” Ramokgopa said. “Everywhere I go you have communities complaining about lengthy power disruptions.”
For example, according to residents of Pimville in Johannesburg, the area had not had electricity since November last year because of the failure of local electricity distribution infrastructure, he said.
Next front
Last-mile electricity distribution infrastructure was “the next front” in the electricity crisis and the collapse of this infrastructure was now happening at a much faster pace than previously expected.
“We know many municipalities are illiquid and not in a position to meet their financial obligations as a result of an eroding revenue base. I think the situation is going to become acute.”
Ramokgopa said he had been advocating for the government to find a “financing dispensation” to address this infrastructure collapse because municipalities did not have the “financial muscle” to respond.
The phase two NIP 2050 pointed out that a large majority of municipal electricity services were inefficient and suffered from low cash collections from customers. This drain on municipal revenue was being worsened by falling revenues as customers moved off the grid as renewable energy alternatives became more cost-competitive.
Apart from eroding municipal finances, it was having a spillover effect as many municipalities struggled to pay Eskom for the electricity they bought from the utility to resell to municipal customers.
Despite a debt-relief intervention introduced by the Treasury last year, arrear debt owed to Eskom by municipalities escalated from about R20bn in 2018 to R75bn by end-February.
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