South Africa is at risk of record power outages this winter because the state electricity company may not have enough supply to meet increased demand.
The country faces a “difficult winter” as it heads into the cold months with 3,000 megawatts less capacity than last year, Eskom acting Chief Executive Officer Calib Cassim told reporters on Thursday.
The utility envisages a worst-case scenario of having to cut 8,000 megawatts from the electricity grid — a process known locally as load-shedding.
“The increase in load-shedding levels does not mean there is a greater risk of a national blackout,” he said, reiterating comments he made earlier this month that the country will avoid a total collapse of its electricity grid.
Africa’s most industrialized economy is already experiencing its worst bout of power rationing yet, with outages this year exceeding those for all of 2022, because Eskom can’t meet demand from its old and poorly maintained plants.
The central bank estimates that the outages will shave 2 percentage points off South Africa’s economic growth rate this year.
The blackouts and the deteriorating economic outlook have weighed on investor sentiment, with the rand dropping 12% this year — the worst performance among major currencies monitored by Bloomberg.
The decline is also at odds with emerging-market peers, which have largely made strides against the US currency this year with Mexico’s peso up 10.5% in the time period. The rand traded 0.8% weaker at 19.4098 per dollar by 9:18 a.m. in Johannesburg.
The outages have also dented support for the governing African National Congress, with opinion polls showing the party is in danger of losing its parliamentary majority in next year’s elections.
Removing 8,000 megawatts of electricity from the grid would result in 16 hours of outages in a 32-hour cycle, Eskom said.