Load-shedding is here to stay for the next two years as experts warn of a jobs bloodbath.
Eskom chairperson Mpho Makwana revealed on Sunday that part of the considerations for the plant performance recovery plan is to implement load-shedding for two years.
However, later in the day, Eskom spokesperson Sikonathi Mantshantsha said the power utility has considered this option but “this is not a possible as it would not guarantee that load-shedding would remain at the lower levels”.
The announcement, which comes as the country has been experiencing load-shedding for over 200 days straight is now feared by experts that it would lead to more job losses.
“The recovery of generation performance will not happen within a short space of time. The execution of the recovery plan requires that power stations be given space and headroom to execute the recovery plan. This requires either adding additional capacity to create space to do proper maintenance without firefighting, or create some predictability by implementing a permanent stage 2 or 3 for the next two years to give sufficient space for maintenance while giving the country a level of predictability or consistency to plan the livelihoods better.
“Shuttling from one stage to another within a short space of time is not good for the business community,” Makwana said.
North West University’s Prof Waldo Krugell said businesses are losing production time and the country should expect more small businesses to shut down if load-shedding becomes a permanent feature as per announcement.
“It spells trouble for the economy. Mitigating against load-shedding is costing businesses a lot of money. Small business that are energy intensive such as local bakery, hairdresser and your small-scale irrigation farmer, who cannot afford a generator, they will feel the pressure,” Krugell said.
He said while the third quarter employment statistics showed an improvement in the number of people employed in the country, it is expected that the fourth quarter of 2022 should show job losses.
Dawie Roodt, the chief economist at Efficient Group, echoed Krugell’s sentiments, warning that more investors would lose interest in the country, leading to a stagnant economy.
“Businesses will not invest in long-term plans. The big businesses are holding back on employment and investments [as we speak]. Since last year, foreign investors have been disinvesting in the country and they are going to many other countries that are competing with us such as India, Indonesia and Malaysia. SA does not have economic growth,” Roodt said.
Cosatu spokesperson Sizwe Pamla said the consideration of permanent load-shedding is tantamount to placing a moratorium on economic growth and job creation.
“Electricity is the lifeblood of the economy... Eskom has just told the unemployed that your chance of getting a job is almost zero in the next two years. Those who are trying to start their own business have been told that there is no hope for the next two years,” Pamla said.
He said small businesses will not have money to fund their enterprises and alternative sources of energy. This would worsen inequality.
“Well-off businesses and individuals will get off the grid and find other energy sources... Businesses that were already struggling will suffocate and there is a very good chance that they will die,” Pamla said.
He added that wages will stagnate and decline, and those operating small businesses will struggle to service their debt due to high debt service costs.
Energy expert Chris Yelland said it will take time to turn Eskom around.
“We must not think that a new CEO will magically fix the problem. It will take years of doing the right thing... I heard Gwede Mantashe saying he would fix load-shedding in six months. I heard Enoch Godongwane saying load-shedding would be a thing of the past in 12 to 18 months,” Yelland said.
He said more people will have to get off the grid.
“Whether you are a domestic, commercial customer, a small industrial business, a farmer... consider getting off the grid because if you wait for the government, you are going to wait for a long time,” Yelland said.
Economist Dennis Dykes said the impact of permanent load-shedding would harm the economy.
“Undoubtedly, this will have a negative impact on small businesses. Businesses that have been holding on may decide that they just cannot operate any more. Unemployment will then follow.”
He said Eskom must procure energy from renewables and get gas from neighbouring countries to relieve pressure on the grid.
“We should not see Eskom as a long-term solution for our energy problems. Its plants are old. Our long-term requirements are going to be met by a range of producers. The sooner that is accepted by the department of minerals and energy, the quicker we will get out of the situation of load-shedding.
“The problem is that we have had promises like this since 2007. So if you are a foreign investor, you got to be very sceptical about the chances of it happening,” Dykes said.
newsdesk@sowetan.co.za
LISTEN | We’re working on it: Ramaphosa on load-shedding
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.