A National Emergency
It has been called South Africa's biggest economic crisis yet - and even government has finally admitted that there is problem. Weeks of countrywide power cuts have cost the country an initially-estimated tens of millions of rands, frustrated business and industry leaders and upset the general public.
News24 tackles the issue and examines why South Africa now finds itself in what Public Enterprises Minister Alec Erwin calls a "national emergency".
The problem:
History: The White Paper on the Energy Policy of SA warned in 1998 that power would run out by 2007. In an attempt to deregulate the industry, government wanted independent power suppliers to come into the market to produce electricity. DA leader Helen Zille says government forgot the barriers that existed for these contractors: the extensive red tape involved and the price of electricity being too low for investors to get a decent return.
Meanwhile existing power plants were "mothballed" (taken out of service) and Eskom was instructed to stop building new power plants. Eskom advised municipalities in the late 1980s and early 1990s to close down their own power stations as "too much power" was being generated. Only in 2004, was Eskom instructed again to build new power plants.
Growing economy: The country's existing infrastructure was built for an economy growing at around 3% annually - but over the past few years, it has grown at over 5%. Government has now admitted that it underestimated the country's economic growth rate.
Coal: Eskom has said that wet weather has hampered coal production and supply. There is also a reported shortage of coal - at some power stations, there is apparently only 1-3 days of coal left. Apparently there is also a global coal shortage. Eskom has asked coal producers to supply an extra 5 million tonnes of coal during the next three months to build stocks ahead of the winter.
Poor planning: Government has admitted to "poor planning", saying it did not foresee the economy growing this fast and depleting the surplus electricity available.
Shortage of skills - in 2005 Eskom already needed 400 engineers. In 2007, it said it expected a shortage of 6 200 technicians in the next five years. The ID said expensive restructuring exercises had directly led to the electricity problems. According to Solidarity, Eskom has lost 15% of its skills since 1994
Old equipment: Several of Eskom's 24 power plants are 30 years or older, which means they need much maintenance and imminent replacement
The solution:
Eskom has announced a three-point plan to decrease electricity use. Power cuts are envisaged for the next month at least and possibly stretching into July. Then there will be rationing of power to municipalities. The last phase is a quota-based incentive scheme. Penalty systems will be introduced for those using more than their allocated power and incentives for those who exceed savings targets
All South Africans are called upon to save power as a matter of urgency.
To have an immediate saving of 8% - industries must use 10% less power, businesses to use 15% less power, hotels, shopping malls 20% less, offices, govt and municipalities 15%, agriculture 5% and residences 10%
The mining sector has struck a deal with Eskom to cut back electricity usage in return for uninterrupted supply.
Promotion of energy-saving compact fluorescent light fittings
Installation of one million domestic solar water heaters
Fitting "smart meters" into homes
Switching to liquified petroleum gas for cooking
Increase in electricity tariffs
Generators to be built at all 2010 soccer stadiums
Take me back to News24's Power Crisis Special Report...