July 2008 Number 10
CDE
ROUND TABLE
An occasional publication by the Centre for Development and Enterprise reflecting discussions held on key national issues
South Africa’s electricity crisis How did we get here? And how do we put things right? In the third week of January 2008, more than 20 per cent of South Africa’s electricity-generating capacity was out of commission. By the fourth week, a quarter of Eskom’s capacity was unavailable. Huge blackouts occurred throughout the country. The major cities were paralysed by traffic gridlock. Many food-processing enterprises lost their entire stock. At least one person died on the operating table.1 The national grid almost crashed. If this had happened, the entire country would have been completely without electricity for several days. In order to prevent this, gold and platinum mines were forced to stop all production for five days on 25 January, a date that became known as Black Friday in the mining industry. The mines were only permitted to resume work after agreeing to an ongoing 10 per cent reduction in their electricity consumption. South Africans quickly learned a new term – ‘load shedding’ – a euphemism for planned blackouts imposed by Eskom, the country’s state-owned electricity monopoly. In Johannesburg and Pretoria, these blackouts lasted for several hours at a time, sometimes more than once a week. Despite being more or less predictable, they caused immense disruption to the economy and to everyday life. Load shedding lasted until early May. The mining sector experienced a 22,1 per cent contraction in output for the quarter. One major mining company was forced to lay off 5 000 workers.2 Manufacturing, services and tourism were also badly hit.