Eskom's plan to keep the lights on

If you have not already read the first part of our simplified history of how Eskom ran out of power perhaps you should.

Eskom in 2008 instituted extensive rolling power blackouts euphemistically called load shedding. The reason is that after many years of abundant cheap electricity the demand exceeded supply.

Eskom had been seeking funding to plan and build new capacity from the Government in the 90's, but the Government had in turn hoped to sell a stake in Eskom and fund the new capacity that way. No-one wanted to buy into what was one of the world's cheapest suppliers of electricity that was facing an expensive build program.

Eskom had three options.

  1. Build more power stations
  2. Get citizens to use less power
  3. End uneconomical business supply deals

It has undertaken to do all three.

Building new capacity

There are five plants under construction or nearing completion and three stations that have been brought back online at a total cost of R340 billion by completion in 2018. These plants will increase capacity by 17 000MW which, according to Eskom is their biggest build program in the company's history.

Reducing demand

You will recall the first response after loadshedding began was to implore South Africans to use less power, it was followed by a massive campaign to replace incandescent bulbs (the ones with a filament) with compact fluorescent lights (CFL's). CFL's use a lot less energy as much as 10 times less and Eskom provided over 45 million bulbs.

They also launched the Power Alert website with messages broadcast during prime time TV to let consumers know what the state of the grid was. The efforts, according to Eskom was able to reduce consumption on average of 174MW.

And they offered rebates for fitting solar geysers which at one point saw 10 000 applications being received a month.

Big electricity users

Dealing with the uneconomic business deals is going to be the most difficult to resolve as Eskom has contracts with big energy users like mines and ore smelters who do play an important role in providing employment and a source of foreign exchange even if their contribution to the total GDP is not as significant as other sectors. Government will need to find a balance between the various sectors of the economy and residents to ensure we can keep the economy growing and paying for the new capacity while not making it unaffordable to residents or putting our credit rating at risk by carrying enormous debt.

It means that even as Eskom appears to slowly start getting ahead of shortfall in supply, South Africa will have years of electricity price increases in store to catch up for all those years of not setting money aside for new power stations and setting the electricity price so low for so long.

If you still want to know more you might take a look at the section that explains how the electricity is actually generated or what you need to know while we still have to contend with load shedding.

Read More
Great ideas, wrong time

Great ideas, wrong time

The iPhone, Ebay and Facebook, we all know these killer applications but what about their very similar predecessors that flopped.

The world of business is changing, here is what you need to know.

The world of business is changing, here is what you need to know.

Companies, institutions and principles, nothing is safe from the impact of the 4th industrial revolution.

What 30 years of data tells us about the past and future of the super wealthy

What 30 years of data tells us about the past and future of the super wealthy

Changes to the Forbes Rich List is like a financial history of the world, reflecting economic booms and busts.

News quiz crossword 28 July

News quiz crossword 28 July

A 10 word news crossword of stories we covered in the last week. Can you solve it?

Everything you need to know about the dark web, but were too afraid to ask

Everything you need to know about the dark web, but were too afraid to ask

The recent closure of two illegal online marketplaces selling contraband has put the dark web back in the spotlight.

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
5 reasons why South Africa granted Grace Mugabe diplomatic immunity

5 reasons why South Africa granted Grace Mugabe diplomatic immunity

 Simon Allison, Africa Editor at the Mail & Guardian explains the political considerations behind Mugabe's diplomatic immunity.

"ANN7 and  New Age sale is effectively a transaction between  Manyi and Guptas"

"ANN7 and New Age sale is effectively a transaction between Manyi and Guptas"

Phillip de Wet, Associate Editor at Mail & Guardian breaks down the sale of Gupta owned ANN7 TV Station and The New Age paper.

This is incredibly embarrassing for both countries - SAIIA Head of Governance

This is incredibly embarrassing for both countries - SAIIA Head of Governance

On Saturday international relations minister Maite Nkoane-Mashabane granted diplomatic immunity to Grace Mugabe.

Read and weep: 10 of the most expensive houses in South Africa

Read and weep: 10 of the most expensive houses in South Africa

These super luxury houses with enormous price tags will induce some serious house envy.

44 drivers arrested for drunk driving in WC traffic blitz

44 drivers arrested for drunk driving in WC traffic blitz

Western Cape provincial traffic chief, Kenny Africa gives traffic updates of what he described as a very hectic weekend in the WC.

Grace Mugabe immunity: SA between ‘rock & hard place’

Grace Mugabe immunity: SA between ‘rock & hard place’

Professor Christopher Landsberg has praised the International Relations and Cooperation Minister for her 'honest approach'.

[Watch] John Maytham shuts down victim shamer on air

[Watch] John Maytham shuts down victim shamer on air

A caller wanted to know what the alleged victim had done in order for Grace Mugabe to assault her.

Meet Bonang Mohale, BLSA's outspoken (‘don’t blame colonialism’) Chairperson

Meet Bonang Mohale, BLSA's outspoken (‘don’t blame colonialism’) Chairperson

The Money Show’s Bruce Whitfield interviews Business Leadership South Africa’s Mohale for his weekly “ShapeShifter” feature.