SA businesses brace for blackouts – again

Concerns over the ripple effect from load shedding has left some members of the business sector taking matters into their own hands.

The Nelson Mandela Bay Business Chamber says load shedding will “inevitably” place businesses under strain and possibly discourage investment, while businesses are having to contend with ever-increasing tariffs.

The Nelson Mandela Bay Business Chamber intends to present a compelling case against Eskom’s latest proposed increase and has submitted its written objection to Nersa ahead of the public hearings in January next year.

Speaking to Fin24, Nelson Mandela Bay Business Chamber CEO Nomkhita Mona said: “Some businesses may need to factor load shedding into their operations, relating both to cost and scheduling of shifts and work, in order to remain equally productive.

“Even so, load shedding will inevitably place businesses under strain,” Mona said.

Mona further expressed concern over the impact on economic growth.

“A reliable supply of electricity at competitive prices is crucial for businesses to remain sustainable, which could in turn discourage potential investors from entering the market, thereby impacting the country’s already sluggish GDP growth even further.”

‘Terribly sad’

“The bottom line is that it is a terribly sad situation and a threatening one at that.

“As a country we were told previous events of load shedding in 2008/9 and 2014/15 were caused by a lack of generation capacity. Now we have more than 5 000MW of generation capacity standing idle and we again have load shedding,” Mona said.

“It is well known that load shedding affects GDP and economic growth to a large extent. If load shedding continues and intensifies it will affect all businesses dramatically, as well as Eskom – as business and households will be looking for alternatives and customers will be lost. It will ultimately cause job losses and the economic decline of South Africa.”

In Mona’s view, a plan from government to ensure this load shedding is here only for the short term is urgently needed, because load shedding is not sustainable.

Businesses bracing themselves

Businesses in South Africa are likely more prepared for the impact of load shedding than in the past, economist Mike Schüssler told Fin24 on Friday.

Eskom has indicated that the risk of load shedding could last for a while. It expects energy availability will continue to decline into early 2019.

“SA businesses (probably already) have generators, invertors and candles. I do, however, know that no-one is ever fully ready. The fact is load shedding will impact gross domestic product (GDP) as production stops or becomes more expensive,” said Schüssler.

He believes the SA business sector never really understood that the country could go back to load shedding stages 2 or 3 in the future.

“They thought that Medupi and Kusile should have been online now and SA should not have load shedding. There is no way that it will not influence have an influence on the ground,” said Schüssler. “So, business people know that load shedding will make an impact, but they can never fully get around it. Confidence is already low and we do not need this now.”

Matthias Boddenberg, CEO of the SA-German Chamber of Commerce, thinks many companies could probably prepare for load shedding due to Eskom publishing alerts ahead of time.

“The ‘old’ emergency plans from a few years ago will probably be used (by businesses) to limit the effects in the day-to-day business,” he said. “A major problem would arise if the load shedding would happen without prior announcement and information. Currently it is difficult to say whether there has been already an impact on the companies and/or the economy.”

by Fin24 –

Carin Smith