Truth about Eskom’s drop in load-shedding

The extended relief in load-shedding in the past two weeks is not because of the improved performance of Eskom’s generating fleet but due to a drop in demand for the power utility’s electricity.

That is according to EE Business Intelligence founder and energy expert Chris Yelland, who analysed the recent reduction in the rotational power cuts in a recent article.

As of Monday, 8 April 2024, Eskom had not implemented load-shedding for nearly 13 days, its longest break in the power cuts since December 2023.

This has led to speculation from the public that the ruling party, which governs some of Eskom’s functioning by proxy, somehow interferes in the implementation of load-shedding.

They have alleged the ANC wants to cast itself in a favourable light by being able to say its turnaround strategy for Eskom is working ahead of the national and provincial elections in May.

Sceptics of the break in power cuts have also accused Eskom of running its power stations to the brink before the elections, then deal with the fallout afterwards.

Yelland refuted this argument and pointed out that Eskom had actually taken more capacity offline for planned maintenance in 2024 than in previous years.

“While unplanned breakdowns are down this year compared to same period last year, this is offset by increased planned maintenance outages this year, compared to same period last year,” Yelland said.

“Thus, the availability of the Eskom fleet this year is similar to that of the same period last year.”

According to the power utility’s latest system status outlook, the average of Eskom’s weekly energy availability factor (EAF) for the first 13 weeks of 2024 was substantially lower than in previous years, as shown in the table below.

Despite the EAF being lower than in 2023, load-shedding has remained suspended since 26 March 2024.

Data from EskomSePush shows that during the same period in 2023, Eskom was rotating between stage 1, stage 2, stage 3, and stage 4 load-shedding, with no breaks in the power cuts until 8  April 2023.

Yelland explained the reduction in load-shedding was driven by five major factors:

• Flat overall demand for electricity due to the weak South African economy.
• Rapidly rising prices of Eskom and municipal electricity, which have increased two to three times the inflation rate for many years, dampen demand for Eskom-generated electricity.
• Load-shedding and low reliability of Eskom and municipal grid electricity, particularly for the last four years, have negatively impacted the electricity supply.
• Electricity customers moving to self-generation and alternative energy sources, including rooftop solar PV, battery energy storage, gas for cooking, solar hot water geysers, energy efficiency, and a general reduction in demand for grid electricity.
• The pipeline of big renewable energy and battery energy storage plants is now coming to the grid, and this trend is accelerating.

Yelland said these factors mean Eskom had lower demand to meet than in the past few years.

“This is resulting in a significant reduction in the frequency and intensity of load-shedding this year compared to the same period last year,” Yelland said.

Eskom’s latest system status outlook showed it had recorded residual energy demand of 48,901 gigawatt-hours (GWh) in the first three months of 2024. That is around 6.04% less than at the same point in 2023.

The graph and tables below show electricity demand in South Africa in the first three months of 2024 and how that compares to the same periods from 2019 to 2023.

The period from 2021 to 2023 already saw Eskom’s electricity demand at its lowest levels in two decades.

Yelland said that Eskom’s death spiral of rising prices and increased load-shedding was causing customers to move to alternative energy sources.

This has resulted in declining Eskom sales volumes, which in turn have seen Eskom bump up fixed costs to recover losses.

“At the same time, Eskom has also been in something of a debt spiral, which has been arrested for the time being by government bailouts from National Treasury, which has put a moratorium on significant new debt by Eskom,” Yelland said.

“The utility death spiral and debt spiral, and National Treasury, is now forcing Eskom and the whole electricity supply industry in South Africa to restructure, unbundle and increase the role of the private sector in financing, construction, operation and maintenance of electricity generation, transmission and distribution infrastructure in South Africa.”

Yelland said this should not be viewed as the privatisation of Eskom but instead as increasing public participation in Eskom’s business by multiple rolepayers — including the general public, development finance institutions, commercial banks, pension funds, other financial institutions, business, and industry.

“A fundamental change is taking place in the electricity sector of South Africa as it starts to catch up with those in many other parts of the world,” Yelland said.