South Africa can end load-shedding if it does the right things for a long time. This includes households and businesses reducing their reliance on Eskom’s electricity supply.
This is feedback from energy analyst Chris Yelland, who told Classic Business that, in the long term, if the country continues to reform the electricity industry, load-shedding will become a thing of the past.
While unplanned breakdowns — unplanned capacity loss factor (UCLF) — are down this year compared to the same period last year, this is offset by increased planned maintenance outages — planned capacity loss factor (PCLF).
Yelland explained that this means that the availability of the Eskom fleet — its energy availability factor (EAF) — this year is similar to that of the same period last year.
Despite the similar EAF, South Africa is experiencing less load-shedding this year than last year.
Lower demand is the reason for the reduced load-shedding. Simply put, businesses and households use less Eskom power.
“It is quite clear that demand for Eskom’s electricity is declining and has been for several years. This does not mean the country is using less electricity. It just means it is not coming from Eskom,” Yelland said.
This means that alternative sources of electricity, such as rooftop solar and commercial installations, supplement Eskom’s electricity generation.
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This reduces the need for electricity generated by Eskom and reduces its burden, enabling it to conduct more maintenance.
Simply put, households and businesses are replacing electricity generated by Eskom with power from their own alternative sources or private providers.
This trend is only set to accelerate as the cost of electricity from Eskom keeps rising, strengthening the business case for alternative sources of energy.
As a result, the utility finds itself in a debt spiral where it has to reinvent itself to compete with private players and relook at its business model.
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