FIFI PETERS: How many of you are experiencing load shedding currently – or anticipating load shedding? One of the analysts we usually speak with said he had an hour left to cook his dinner, because that’s when his power was going to get cut.
Nonetheless, Eskom earlier today announced that load shedding would begin again. This is darkening the country’s growth and employment prospects, according to research house PwC, which expects load shedding to cost the country almost 350 000 jobs this year, as well as shave off much-needed growth from the economy.
But here to tell us more about this forecast is Dr Christie Viljoen, an economist at PWC. Christie, thanks so much for your time. That 350 000 is a huge number in terms of job losses. How did you arrive there, and is this the worst that it could get?
DR CHRISTIE VILJOEN: Well, I guess there are several ways that we could look at this and do simple calculations [and] very complex calculations. We just took a perspective on how much South Africa’s economy is not growing because of load shedding. That’s about three percentage points. So the forecast for economic growth this year is maybe 4% – it could have been 7% if we didn’t have load shedding. Those three percentage points less growth mean less business growth, less employment growth. Then with some calculations we woke up to this estimate of about 350 000 jobs that we could have added this year were it not for load shedding.
FIFI PETERS: Would your research have gone in as deep as to identify which sectors could have added these jobs?
DR CHRISTIE VILJOEN: We don’t have separate numbers for different industries. The bottom line is that every single industry, every sector, every geography, every city, every town is being affected by this. I had a question this morning about the impact on agriculture, where electricity is a very big input; the same with mining and manufacturing – every small business needs electricity. You have to spend money on generators, solar panels, fuel for those generators, so it’s affecting the whole economy. There really isn’t any industrial sector that has been able to jump free from this situation.
FIFI PETERS: Talking about those other sources of power – notwithstanding the generators, but also the sources from your more renewable sectors, are you seeing interventions of trying to beef up the sector to eventually reduce demand from the national grid? Are you seeing those interventions starting to bear fruit, and thus minimise the impact of load shedding on the economy and jobs?
DR CHRISTIE VILJOEN: Well, we’re seeing businesses and individuals investing in this kind of technology. At the moment we have about 40 000 ‘pro-sumers’ – not just consumers [but] prosumers that produce electricity and consume it. It might be someone that’s got solar power on their house on the roof, and they feed some power into the system. We’re seeing so many of these opportunities and new technologies being introduced. People are spending money in order to get off the electricity grid.
We’re also seeing that there are increasing amounts of municipalities that are looking at this as a way of improving the reliability of the supply that they can give to their customers. So most certainly, when it’s affordable, where people can actually put the money in, they are doing this.
But then again, it is companies that can actually spend money on this that are benefiting; the small businesses are struggling, they cannot afford this. The low-income households cannot afford this, so there’s an element of inequality in this ability to get away from the grid and improve the reliability of the electricity you’re using.
FIFI PETERS: Is there any sort of light at the end of the tunnel, or an approach of looking at the glass half-full in this energy crisis in the country?
DR CHRISTIE VILJOEN: Well, as we know, electricity load shedding was just announced an hour or two ago. So at the moment I think many people who might be listening on the radio maybe have a battery-powered radio where the electricity is off. They might be saying, well, there is almost no light at the end of the tunnel.
I think the one thing that we could maybe mention is this move to renewable energy. Last week we saw an announcement about another list of two dozen preferred bidders for renewable energy, which the energy minister announced. We know this week there’s the announcement that international economies will be supporting South Africa’s move towards a greener energy future. It’s not easy to find these positives, but we have these opportunities.
The progress might be slow, but we are moving in the right direction. It’s not going to turn the lights on tonight, and it might resolve the problem next week or next month, but it is a small step in the right direction if we want to try and find a positive.
FIFI PETERS: Dr Viljoen, thanks so much for giving us that detail, Dr Christie Viljoen is an economist at PwC.