South Africa hit by new electricity crisis

South African households have been hit with a new electricity crisis due to the country’s ailing distribution infrastructure, which is managed by Eskom and municipalities. 

As demand for electricity has increased with population growth and migration, parts of the country have been hit with load reduction or blackouts due to infrastructure failures. 

This crisis is now front-of-mind for Electricity Minister Kgosientsho Ramokgopa, along with the country’s repeated above-inflation increases in electricity prices. 

Ramokgopa has previously warned that the collapse of distribution infrastructure threatens the utility’s progress on load-shedding. 

Critics have argued that the ongoing reforms in South Africa’s electricity sector are paying little attention to the vital area of distribution infrastructure. 

“If there is something that keeps me awake at night, it is load reduction and the impact it is having on South Africans,” Ramokgopa told Newzroom Afrika. 

“Load reduction primarily happens in peri-urban areas, informal settlements, and less affluent areas. It gives the impression that load reduction is a punishment for the poor.” 

Ramokgopa explained that it is a complex issue, with distribution infrastructure being managed by both Eskom and municipalities.

Due to provision obligations in South Africa’s constitution, municipal governments play a key role in the electricity sector, distributing around 40% of all electricity. 

Municipal governments primarily serve households and small businesses, with the remaining 60% of users being served by Eskom, which caters to large users and municipalities without a network.  

“It is a failure at the level of Eskom and municipalities to provide sufficient infrastructure and capacity to accommodate the load growth in particular areas.” 

A major driver of this has been the proliferation of informal settlements in parts of South African cities and rural areas, creating greater levels of demand that were not planned for. 

“We have not kept up with that by renovating and expanding the capacity of distribution infrastructure in parts of South Africa.” 

Ramokgopa said there is a plan to address these challenges and understand the urgency, but explained that load-shedding was the bigger problem that had to be tackled first. 

With load-shedding being significantly reduced, the ministry and Eskom are able to shift some attention to distribution infrastructure. 

Municipal headache

A major challenge in addressing this crisis is that it requires the buy-in of South Africa’s municipalities, of which many are in dire financial straits. 

Municipalities manage a significant part of South Africa’s distribution infrastructure at 40%, with the majority of distribution to households being done by local authorities. 

The role of municipal governments includes maintaining infrastructure, providing new connections, and setting minimum service levels. 

However, many of them fail in these duties and struggle to deliver reliable electricity services to their constituents.

In recent years, numerous outages and equipment failures have occurred at this level, exacerbating load shedding, as municipalities lack the funds to adequately maintain their infrastructure.

The Organisation for Economic Cooperation and Development (OECD) said this problem is complex and cannot be solved by allocating more funds towards infrastructure maintenance or development at the municipal level. 

Rather, it stated that the roles of municipalities and Eskom in electricity distribution must be completely redefined to better serve South African consumers. 

“This requires revising management and funding models of municipalities, including by earmarking electricity revenue for grid investment, and exploring distribution concessions,” the organisation said. 

Energy analyst and managing director of EE Business Intelligence, Chris Yelland, has referred to the distribution segment as completely dysfunctional. 

Many municipalities are unable to pay Eskom for the electricity it provides, placing it under increasing financial pressure. 

“This points to a completely dysfunctional electricity distribution sector. I do not see sufficient attention given to the reforms needed,” Yelland said.

“This sector really needs more attention now, much more attention because that is where a big crisis is brewing.”