Load shedding forces SA to cut reliance on Eskom

Johannesburg - With power outages now a daily reality and expected to last for the next three years, business and individuals are taking matters into their own hands.

The economy is experiencing its worst electricity crisis since 2008 with state power firm Eskom implementing rolling blackouts as its old creaking grid struggles to meet growing demand.

Mobile phone giant MTN [JSE:MTN] and Standard Bank [JSE:SBK] are among the companies that have decided to go it alone in trying to keep the lights burning at their businesses.

Households are also seeking to become self-reliant on power supply in a country that has barely raised installed capacity since apartheid ended two decades ago, despite millions of households joining the grid.

State-run utility Eskom has admitted to ignoring proper maintenance on its grid over the years, and the network cannot reliably supply the 42 000 megawatts (MW) required to keep the economy ticking.

The South African Reserve Bank has already shaved off at least 3 basis points on its 2015 growth forecast to 2.2%.

MTN has installed a 2 MW power plant at its Johannesburg headquarters to reduce its reliance on Eskom. As a bonus, by generating electricity the firm has slashed power bills at those offices by nearly a third.

"If you have the recipe for producing cheaper power, why would you not do it because it's going to save you," said Willem Webber, MTN's energy plan's implementation manager.

The initiative has been so successful that MTN plans to increase output to 24 MW within three years, he said.

To generate electricity using its gas plant, MTN spends 0.87 cents per kilowatt hour against the R1.5 to R1.40/kWh it pays Eskom.

Standard Bank has also installed a gas plant generating 1 MW at a cost of R40m to provide 17% of the 6 MW required at one of the lender's offices in a Johannesburg suburb, or enough to power about 2 500 homes.

Both firms are burning natural gas to produce electricity.

Mining sector hit

The mining industry, the leading foreign exchange earner, is also hurting as Eskom asks firms to reduce consumption by 10% to 20% during controlled outages.

Harmony Gold [JSE:HAR] chief executive Graham Briggs said while Eskom does not cut power to the firm's shafts, Harmony has, like its peers, had to reschedule energy-consuming activities such as hoisting ore to the surface until after 22:00 when rolling blackouts are lifted.

READ: Amplats, Harmony say power cuts threaten output

Households are also seeking alternatives to Eskom's erratic supply, said Inus Dreckmeyr, managing director at engineering consultancy Netshield SA, which advises on wind and solar solutions. Last week alone, the firm had 90 applications from households looking for alternative means of electricity supply.

Household usage varies, making it difficult to estimate installation costs for a solar or wind power unit to take a typical home off the grid, but Dreckmeyr estimates it would cost R150 000 to R250 000 to install such a system.

"There is a lot of aggression in people's attitude towards electricity at the moment. A lot of people start off with the simple complaint that they are tired of Eskom," Dreckmeyr said.

* Are you making any moves to get off the Eskom grid? Send us your stories and pictures and you could get published.


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