Power cuts hit the business sector in South Africa

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UNSTABLE SUPPLY In this file photo taken on June 8, 2022, a general view of the absorbers at the Kusile power plant, a coal-fired power plant located on the Hartbeesfontein farm in eMalahleni. South Africa’s electricity crisis is taking a heavy toll on businesses large and small as continued blackouts halt productivity, hampering desperately needed post-pandemic job growth. AFP PHOTO

JOHANNESBURG: South Africans’ annoyance at the power cuts has given way to concern, with business owners complaining that the protracted energy crisis for which no end is in sight is eating away at profits and hampering business economic.

At Native Rebels, a colorful second-floor bar flanked by a large balcony in Johannesburg’s Soweto township, the cost of running a generator to keep the lights on for weeks was a huge burden, the co-owner says Masechaba Nonyane at Agence France-Presse. .

“We thought Covid was bad…now that’s been replaced by eight hours without power,” the 33-year-old entrepreneur said.

“It’s been really, really crippling,” she added.

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Planned blackouts, known locally as load shedding, have plagued the country for years but have recently reached new extremes.

This month, the country suffered nearly two weeks of phase 6 load shedding, which involves several power outages per day, each lasting between two and four hours.

Each of the eight stages of load shedding costs the country’s economy an additional 500 million rand ($29 million) per day in lost business, according to government estimates.

The crisis has been exacerbated by a labor dispute at the coal-fired power plants of monopoly electricity supplier Eskom.

The dispute was resolved earlier this month as Eskom agreed to a pay rise for its strikers – but power cuts have yet to significantly decrease.

Load shedding = load shedding

“Shedding will lead to further job losses, which will lead to lower production. This will affect spending. This will further affect economic growth,” said Ismail Fasanya, lecturer in economics at the University of the Witwatersrand.

Businesses have had to spend money on generators, which has increased the cost of running a business, potentially deterring local entrepreneurs looking to start new businesses as well as foreign investors, Fasanya said. .

The impact on jobs is particularly concerning in a country struggling with 34.5% unemployment following the coronavirus pandemic, he said.

Addressing the South African Communist Party congress on Friday, President Cyril Ramaphosa, who has come under pressure to resolve the issue, said he would soon announce measures to deal with the crisis.

Although the details remain unclear, the president said one solution could be to create other state-owned electricity companies to compete with Eskom, which currently generates more than 90% of the country’s energy.

“We must use all available means and remove all regulatory hurdles to bring additional electricity to the grid as soon as possible,” Ramaphosa said.

‘Very worried’

Energy experts and even debt-ridden Eskom have called for rapid government investment in renewable energy, especially solar power, as the best option for rapidly increasing energy production.

“It will go a long way for [supporting] small businesses and reduce job losses,” Fasanya said.

In May, Energy Minister Gwede Mantashe told parliament that while renewables are slated for supply, gas, coal and nuclear projects are also underway.

Whether these measures come quickly enough to prevent businesses from closing remains to be seen.

In Soweto, bar owner Nonyane said she has already had staff shut down early on slow nights to reduce diesel consumption.

“I’m very worried about how we’re going to survive, I’m worried about people’s jobs, how many people we can save,” she said.

“If people don’t work and they don’t get an income, you have a lot of problems as a country.”

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