How Eskom, Africa's biggest electricity producer, ran out of power

South Africa generates a lot of electricity. 41 194 megawatts if that means something to you.

This simplified explanation hopes to help you understand why, if we supposedly have so much capacity, we are struggling to keep the lights on.

South Africa has lots of coal.

In the 80's South Africa built enough coal-fired power stations to last for over 20 years and there was so much capacity the electricity price was the among the lowest in the world (and still is). Electricity in South Africa was like petrol in oil rich nations, there was so much of it, it was almost free.

South Africa was also not concerned with providing electricity to all of its citizens.

The Kendel Power Station in Mpumalanga is the largest coal-fired power station in Africa

Eskom

Fast forward 20 years and we have a democracy that is looking to grow the economy and connect more and more South Africans to the grid. South Africa had connected 85% of the population to the grid in 2013 compared to the global rate of 80%, the developing world rate of 74% and 30% of Sub-Saharan Africa.

Some of the deals to help the economy saw big electricity users like ore smelters negotiate deals that justified having ore mined in another country and brought to South Africa to be processed because the electricity was so cheap. Building a smelter is not cheap though, so the electricity price was not based on what it cost to generate but what the value of the processed ore was and those deals were set to remain for a long time.

World Bank data 2010-2014

South Africa has 32 power producing plants, 5 of those are new or nearing completion

Eskom

Eskom and the Government (the owning shareholder) recognised that capacity would be reached around 2005 and began looking for a private partner in the 90's to buy a stake in Eskom and to help pay for building the new capacity. Unfortunately the very cheap electricity and the amount of money that would be required meant no-one was willing to invest.

Eskom changed how it managed it coal supplies in 2000 the impact was having less coal stockpiled and access to coal supplies that were from a greater number of sources, while it had merit to do this, the limited time to get it running optimally was not resolved by the time the crisis hit in 2008 and added to the difficulty in securing enough coal.

With time and capacity running out South Africa's electricity demand exceeded the supply in 2007 and load shedding became a household word.

If you would like to know more, see our section on what Eskom did next or the section about how we generate that 41 000 megawatts.


This article first appeared on 702 : How Eskom, Africa's biggest electricity producer, ran out of power


Recommended

by NEWSROOM AI
Read More
Space weather: sunny with a chance of destruction

Space weather: sunny with a chance of destruction

Solar activity could result in a rare and improbable event which could send civilisation back to the dark ages.

Peak disruption - is the internet revolution almost over?

Peak disruption - is the internet revolution almost over?

The likelihood of seeing a new Alphabet or Alibaba in the next decade is declining.

The world may soon have only one time zone (and a new calender)

The world may soon have only one time zone (and a new calender)

You may think that the time and date is unchanging, but it does change, and it might do so again.

[Video] The song Cape Town hopes will attract visitors in winter

[Video] The song Cape Town hopes will attract visitors in winter

Cape Town Tourism has created a novel way to promote the Mother City during the 'green' season

How Eskom, Africa's biggest electricity producer, ran out of power

How Eskom, Africa's biggest electricity producer, ran out of power

Despite producing 45% of the electricity in Africa, Eskom couldn't keep the lights on - the simplified story of how it happened.

Load shedding - what you need to do

Load shedding - what you need to do

We explain what it is, who does it and why and how you know when you will be affected.

Popular articles
47% probability of the rand crashing in next 12 months - Rand Merchant Bank

47% probability of the rand crashing in next 12 months - Rand Merchant Bank

The writing is probably on the wall for the resurgent rand. Bruce Whitfield interviews John Cairns, a Strategist at RMB.

'Old Mutual claimed they were the cheapest. They were the most expensive!'

'Old Mutual claimed they were the cheapest. They were the most expensive!'

Personal Finance's retired founding editor Bruce Cameron on his attitude toward money (hopes and fears, successes and failures...)

'Public Protector Busisiwe Mkhwebane made lots of mistakes and simply lied'

'Public Protector Busisiwe Mkhwebane made lots of mistakes and simply lied'

Public Protector Busisiwe Mkhwebane lied and acted in bad faith, the ConCourt ruled. Bruce Whitfield interviews Dr Cathy Powell.

How to live off a dread disease benefit

How to live off a dread disease benefit

Personal finance advisor Warren Ingram discusses "dread disease benefits", typically paid out as a lump sum.

'It's about time too!' DJ Fresh on his new 947 gig  #FreshOn947

'It's about time too!' DJ Fresh on his new 947 gig #FreshOn947

The news that DJ Fresh would be joining 947 was dominating on social media on Monday with the hashtag #Freshon97

Vaginal ring effective in HIV prevention, study shows

Vaginal ring effective in HIV prevention, study shows

The ring offers an alternative to taking an oral pill every day and needs replacing just once a month.

Brand new business hub to help startups get off the ground  - CPT

Brand new business hub to help startups get off the ground - CPT

It's being dubbed a 'one-stop-shop' for entrepreneurs and startups looking for opportunities in the Mother City.

'A lot of people may have wanted him dead.'  - Who killed Mark Batchelor?

'A lot of people may have wanted him dead.' - Who killed Mark Batchelor?

A Sunday newspaper report has suggested the soccer ace's death may have been linked to a missing stash of cocaine.

Paying off your credit card every month to avoid interest? The banks are sneaky…

Paying off your credit card every month to avoid interest? The banks are sneaky…

Consumer journalist Wendy Knowler warns prudent credit card holders to keep tabs on their banks. In this case, it’s FNB.