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South Africa 25 January 2023

Electricity tracker

Shireen Darmalingam

·       This monthly report tracks power utility Eskom’s ability to supply power to the grid, demand for electricity, and the consumption of electricity. It reviews Eskom’s Energy Availability Factor (EAF) as well as how unplanned outages are affecting power supply in SA.

·       Rolling blackouts continue despite the announcement of energy reforms to eventually end these recurring outages. Supply cuts were implemented in the past year, with a record number of load-shedding days.

·       The power utility’s fleet shows no sign of improved generation capacity despite the reforms announced to address electricity supply shortfalls; unplanned outages increased. The EAF averaged around 58.7% in 2022, down from 62% in 2021 and 65% in 2020. It remains well below the utility’s target of 75%.

·       The SARB estimates that loadshedding likely shaved off 2.1-2.3 ppts from quarterly real GDP growth in Q3:22 (depending on exactly how the impact of loadshedding is modelled).

·       The National Energy Regulator of South Africa (Nersa) has approved an 18.65% (the highest in 10 years) increase in electricity tariffs, effective 1 April 2023. Eskom had applied for a 32% increase for the fiscal year 2023/24. Nersa has also granted Eskom a 12.74% tariff increase for 2024/25. President Ramaphosa had reportedly appealed to Eskom’s board to suspend its 18.65% tariff hike. This comes following the announcement that SA may face two years of persistent blackouts as it overhauls its aging power stations and work on various projects to increase electricity capacity. Ramaphosa commented that it would not be fair to impose the tariff while there is loadshedding. Eskom has, however, reportedly noted that it would not be feasible for them to not raise tariffs. Nersa is due to have a board meeting to discuss concerns raised about the recent electricity tariff increase it granted to Eskom.

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