At the beginning of this 2023, it is evident that we are in for a difficult year. “Outgoing Eskom CEO Andre de Ruyter described the load shedding outlook for 2023 as extremely bleak.” while participating in a discussion at the Investing in African Mining Indaba on the 7^th February 2023, according to EWN.

BusinessTech provides more detail on what the outlook for electricity supply is: “Eskom chairperson Mpho Makwena says that the power utility aims to deliver some degree of predictability for South Africa while the company executes its turnaround plan.

This will require “some level of” permanent load shedding at stage 2 or stage 3 for at least two years so that critical maintenance can be done on power stations.”

Loadshedding, is currently the greatest threat to economic growth within South Africa and if continued unabated, for the next two years, could spell disaster. According to IOL, following President Cyril Ramaphosa’s January 8 Statement at the ANC 111^th anniversary in Bloemfontein, “Isiah Mhlanga, Alexander Forbes chief economist, said Eskom’s prolonged stage 6 load shedding was causing significant damage to the country’s economy, wiping off more than R4 billion from GDP for each day it continues. 

Another economist, Francis Stofberg, said that the South African economy could at least be 8% to 10% larger if there was no Eskom load shedding.”

It is clear that a solution is needed, sooner, rather than later. The macroeconomic perspective is indeed concerning, however at the coalface are ordinary people with monthly bond repayments, alternatively rent, transportation costs, school fees, groceries and other costs which seem to continuously escalate as salaries and businesses yield fewer returns. BusinessTech, in an article dated, 2^nd February 2023, puts numbers to the impact felt by the consumer: “Financial stress is a key concern for South Africans, given the cost-of-living squeeze: South African consumers surveyed by Deloitte at the end of December 2022 noted that they are delaying large purchases (50%), feel their financial situation has worsened over the past year (39%), and are concerned about their credit card debt (38%) and about making upcoming payments (25%),” 

As always though, we have the option of accepting things as they are, or in true South African fashion be part of the solution.  The good news is that half of the work, toward the solution, has been done. 

Another coal-fired power station is not a viable solution to solve the problem within the next two years. The two most recent additions to the South African electrical grid are Medupi and Kusile Power Stations. As but one example, the time it took to build Kusile – albeit one of the largest coal-fired power stations in the world – demonstrates how long it takes to build one of these behemoths. “The construction of the power plant began in August 2008. Units 1 and 2 were synchronised to the national grid in March and July 2017, respectively. Unit 1 was brought into full commercial operation in August 2017.

The third unit was synchronised by March 2019. Units 2 and 3 started full commercial operations in October 2020 and March 2021, respectively. The total planned operational life of the power plant is 50 years.” according to Power Technology. 

Fifteen years later, Kusile is not completely online and further, South Africa has made commitments to move toward greener, sustainable, cleaner energies: “The governments of South Africa, France, Germany, the United Kingdom and the United States of America, along with the European Union, have today announced a new ambitious, long-term Just Energy Transition Partnership to support South Africa’s decarbonisation efforts… The Partnership is expected to prevent up to 1-1.5 gigatonnes of emissions over the next 20 years and support South Africa to move away from coal and to accelerate its transition to a low emission, climate resilient economy.”

The Just Energy Transition Partnership presents the opportunity for business and the State, over the next two years, to reverse our current economic woes. In the earlier quoted BusinessTech article, dated the 2^nd February 2023, Deloitte South Africa Associate Director Hannah Marais, is quoted as saying that: “What could be a game changer for the country,… is leveraging the opportunities linked to its own energy transition goals – i.e., a move away from a coal-dominated energy mix while overcoming its power generation shortfalls – as well as supplying and adding value to critical commodities in a global clean energy future.

“On the former, South Africa has massive renewables potential, not only in solar and wind, but also in green hydrogen,” she said.

“On the latter, it also has a notable comparative advantage in supplying key minerals and metals for clean energy applications.”…

Platinum group metals, used in catalytic agents in hydrogen electrolysis and fuel-cell applications,

Vanadium, used in input for long-duration battery energy storage applications,

Rare earth elements used in permanent magnets in the electrical motors of wind turbines and in electric vehicle motors, and

Nickel, which has applications in EVs and battery storage, and hydrogen and geothermal technologies.

“This could help give rise to new drivers of economic activity that boost growth and create jobs, while also ensuring a just and fair transition toward carbon neutrality,”…

The push into the renewable sector isn’t too far from reality, either. The emerging green hydrogen sector has been identified as a new form of ‘gold rush’ in South Africa with the government planning big moves into the field…

The South African government has already set aside R300 billion for funding green hydrogen projects through Infrastructure South Africa (ISA).”

The time to turn around a bleak economic future is now, and the resources are available. What is needed are innovative entrepreneurs willing to solve a national problem and a Government committed to supporting the transition away from our current power crisis. More importantly it is an opportunity for economic growth out of a potential disaster and an opportunity for solving future energy needs in a sustainable and environmentally friendly manner.