Eskom energy crisis will influence South African elections

Eskom energy crisis will influence South African elections
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“Rolling blackouts” that hit South Africa on 6 March 2014 could influence the upcoming elections. The state-owned power utility company Eskom blames the weather and ageing infrastructure.

Eskom has struggled to meet South Africa’s energy needs for years, as aging infrastructure and ever-increasing demand has strained the national power grid. In the latest rolling blackouts, production capacity loss primarily at the Kendal station caused an energy emergency forcing the blackouts.

Power demand or production changes of as little as 1500 megawatts (MW) can cripple the Eskom power grid, according to the company’s own press release. It also noted that the overall system has almost no margin of error in the event of an emergency. Many of the nation’s larger power plants produce between 3000-4000 MW, and are powered almost entirely by coal.

As the energy crisis began to take shape early on 6 March 2014, the Eskom system came under strain as sustained hard rains in the northeastern part of the country created a wet-coal slurry at the Kendal Power Station. The wet coal crippled four out of the station’s six blast furnaces, reducing capacity by about 2700 MW at Kendal. Wet coal cannot be effectively blown into the power station’s furnaces, as it would quickly clog input pipes.

Problems due to weather at other stations also contributed to the blackouts, with an overall energy drop of 3320MW according to Eskom at the crisis’ peak. Despite the official end to load shedding, the energy crisis remains with outgoing Eskom CEO Brian Dames warning of possible blackouts throughout March and April 2014.

Indications of the pending energy crisis in South Africa have long been noted since even before the 2008 blackouts, with calls for increased energy capacity at Eskom throughout the 1990s. The national power utility company took minimal action taken before the mid-2000s.

Political failure of Medupi power station

With ample warning of a long-term energy crisis, Eskom began awarding contracts for the construction of a new 4800 MW coal-fired power plant in Medupi in 2007, with a scheduled “first fire” date in 2012. Despite this plan, the Medupi project has been hit by a series of delays, and these delays are seen as one of the largest contributors to the country’s current crisis.

Corruption allegations, strikes, and problems with contractors have all forced the push back of the first fire date until at least mid-2014. Initially criticized as a pet project meant only to fill the coffers of the ruling African National Congress (ANC) party in 2008, opposition voices rallied for an investigation into the choice of Hitachi Power Africa. At the time of the contract award, the ANC owned a 25% share in Hitachi, and ANC party senior member Valli Moosa was also the chairperson for Eskom.

An official investigation and independent audit found no overt favoritism in the contract award, but international media has noted that the poor management of the conflict of interest has tainted the project since its inception. The official corruption investigation came to an end with the ANC agreeing to sell off all ownership in Hitachi.

Since the initial corruption allegations, the project has also been hit by a series of delays, which have called into question the chosen contractors’ capacity to deliver on the final project and Eskom’s management capacity. Both Hitachi, which was tasked with building the boilers, and Alstom SA, which was charged with creating their control systems, have failed to deliver on their contracts.

Observers have noted that both these companies may have lacked the personnel capacity at the project’s start to meet their contractual obligations, and have had to rely heavily on on-site job training initiatives. Delays caused by strikes are also partly to blame for the project’s postponement.

Implications for elections and the economy

With the national elections less than two months away, the ANC will mostly likely suffer the most from the rolling blackouts. The MPs from the official opposition party, the Democratic Alliance (DA), have already begun squarely placing the blame on the ANC for the continued energy crisis.

The ANC will not lose the general election, however. But, the energy crisis will likely hurt them in the cape provinces where the DA has broad support. It is likely that their vote share will fall below the 2009 level of 65.9%, but not by more than a few percentage points.

Finally, while the rand was not hit significantly by the blackouts, sustainable economic growth will be hindered by the energy crisis until at least the Medupi Power Station comes online, and likely beyond that date. Both mining and oil and gas production will be hit hardest by any future blackouts.

The present blackout could have been worse, if not for a seven-week long strike in the platinum mining sector, which resulted in lower energy consumption for the industry overall.

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