Eskom, the state-owned utility, said on Tuesday that it had saved more than R16 billion in diesel expenditure over the last year due to its ability to prevent load shedding and produce more electricity.
The power utility added that South Africa spent around R26 billion during the same period in the previous year on diesel in order to keep the country’s Open Cycle Gas Turbines working.
Monday also marked a new milestone for South Africa: 300 days without load shedding.
This feat was last seen in June 2018 and is mainly a result of Eskom’s Generation Recovery Plan.
Eskom’s Group Executive for Generation, Bheki Nxumalo praised his employees for the incredible feat.
“Credit goes to all our 40,000 dedicated and skilled Eskom employees who are committed to serving South Africa. Our sights are now firmly focussed on delivering one year without load shedding at midnight on March 26, 2025,” Nxumalo said.
“These 300 days without load shedding have been characterised by a significant reduction in unplanned outages, which have long been one of the biggest challenges, a notable improvement in the energy availability factor of approximately 7%, and savings in diesel expenditure of R16.42 billion,” he added.
Public sentiment
Eskom’s Group Chief Executive, Dan Marokane said that the lack of load shedding has also helped with business confidence and noted that public sentiment on Eskom’s ability to perform has changed for the better.
“This concrete and ongoing delivery of the action plan has boosted business confidence with credit rating agencies and banks stating Eskom’s performance recovery is a key contributor towards positive sentiments as far as South Africa’s GDP growth prospects of up to 2% are concerned,” Marokane said.
“Public sentiment is shifting, business leaders who once had to invest precious capex in self-generation have enquired whether they should revert to investing in Eskom for their power needs. The savings we are making in diesel spend are invested in the business to drive efficiencies further and place Eskom on a path to profitability and long-term operational and financial sustainability,” he added.
GDP
The Minerals Council said that ongoing stability in electricity availability from Eskom will be a boon for economic growth in 2025, with South Africa’s GDP set to grow by 2% this year.
Andre Lourens, an economist with the Minerals Council, said the organisation anticipated that the sustained absence of power cuts would be an important factor behind faster domestic real GDP growth in 2025.
“Growth of 1.5% to 2% is pencilled in for 2025, up from a projected less than 1% in 2024. We are optimistic that electricity availability is no longer a binding constraint on mining activity,” Lourens noted.
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