South Africa’s Economic Losses from Power Cuts Decrease by 83% as Supply Stabilizes

South Africa’s economy faced an 83% decrease in power-cut losses last year, dropping to 481 billion rand due to improved electrical supply stability. The GDP increased by 0.6%, supported by better maintenance measures from Eskom Holdings. Yet, intermittent outages and procurement delays present ongoing challenges for the country’s energy sector.

According to a recent report by the Council for Scientific and Industrial Research, South Africa experienced an 83% reduction in the economic costs of power cuts last year, marking a significant improvement in electrical supply stability. The financial impact of these outages, termed loadshedding, fell to 481 billion rand ($26.7 billion) from a staggering 2.9 trillion rand in 2024 when blackouts were at their peak. This positive shift coincided with an increase in the gross domestic product, which reached 4.7 trillion rand, representing a 0.6% growth from the preceding year.

This improvement is attributed to the efforts of the state utility, Eskom Holdings SOC Ltd., which implemented increased maintenance protocols and other measures aimed at enhancing the reliability of its coal-fired power plants, the primary source of electricity in the country. Despite these advancements, intermittent outages have been reintroduced this year due to ongoing vulnerabilities in the power system, as indicated by Electricity Minister Kgosientsho Ramokgopa.

The procurement of new generation capacity has faced delays, contributing to concerns about the stability of the electricity supply. Notably, the nation’s only nuclear power facility, once deemed the most reliable, has also experienced operational failures. Eskom is striving to further enhance its fleet’s performance, having achieved an energy availability factor of 60% last year—the highest level since 2021. Furthermore, electricity demand declined by 3% in 2024, which has further aided in maintaining supply, with trends indicating a continued decrease in future demand.

South Africa has made significant strides in reducing the economic impact of power cuts, with an 83% decline in losses due to improved electrical supply stability. This progress results from diligent maintenance by Eskom and an overall decrease in electricity demand. However, challenges persist, as the power system remains susceptible to vulnerabilities due to delayed generation capacity expansion and outages. Nevertheless, the overall economic growth foreshadows a more stable energy landscape moving forward.

Original Source: financialpost.com