The Energy Crisis
South Africa is in the midst of a country-wide energy crisis. Eskom, the South African public utility, proved its own unreliability throughout 2015 when a quarter of its energy capacity broke down on multiple occasions. Looking ahead to the rest of 2016, there are 90 days where “load shedding,” which is turning off the power in order to protect the grid, is projected to occur. In South Africa, load shedding has a devastating effect on small businesses such as grocery stores and other types of shops that require electricity to run. As load shedding and power outages have become common due to the vulnerability of the power grid, the lapses have had a negative impact on the economy. Lynne Brown, Minister of Public Enterprises, explains that each month, there is a 7.2 billion dollar loss in production, revenue, and wastage due to the unstable electric supply (Mannak).
First, the fragility of the power supply in South Africa severely harms retail stores. Small businesses are struggling to keep afloat as they cannot afford to pay for back-up generators that might curb the instability of the electric supply. In addition, the lack of consistent energy throughout a week decreases the shelf life of much of the food which in turn, increases the amount of waste and lowers profit margin (Mannak). Power outages harm large chains as well. According to Whitey Basson, an executive of the popular grocery chain Shoprite, in the December of 2014 , $650,000 was spent to run auxiliary diesel generators(Cohen). This shows that even the businesses that can afford to spend their money on an extra generator lose a large portion of their profits on powering the generators.
Secondly, although the South African government has spent billions of dollars to find a solution to the problem, no concrete solution has been discovered. As of now, South Africa has approved 13 sources of renewable energy including a nuclear energy partnership with Russia (Price). These 13 sources could be the answer that South Africans are looking for, but none have started producing energy. Even if South Africa finishes the negotiation stage of fixing the issue and begins to build, constructing a power plant takes 20 years to complete, so while South Africa has found long term solutions to the energy crisis, they still need to look in the short term.
As load shedding continues, the South African government has placed more importance on the need for reliable energy. In the modern age, energy is necessary to sustain a growing economy, and the South African government understands this. Since 2012, in terms of share of GDP, South Africa is the 4th largest investor in renewable power as it tries to right itself amidst its energy crisis (Price).
Works Cited
Cohen, Michael. "What Is South Africa Doing to Tackle Its Electricity Crisis?"Bloomberg.com. Bloomberg, n.d. Web. 07 Mar. 2016.
Mannak, Miriam. "News & Comment on Global Public Financial Management." The Economic Impact of South Africa's Energy Crisis. Web. 04 Mar. 2016.
Price, M. "Nuclear is way to go." Cape Times [South Africa] 21 Sept. 2015: 8. Global Issues In Context. Web. 7 Mar. 2016.
I appreciate the way that you stayed impartial throughout the whole article and you did not choose a side. Do you happen to know what the primary source of renewable energy will be in the future? My favorite part of the article was the way that you introduced the issue. It was very smooth and led into the article with ease.
ReplyDeleteI like how you kept a neutral ground while writing this article. I also liked your introduction and appreciated how you were able to incorporate a lot of information about the issue. What will South Africa's main source of energy be?
ReplyDeleteI really liked the quantitative data that you expressed in your paper. My main takeaway is that something needs to be done about the energy crisis by finding a short term fix, while also working on the longterm fix. How did you stumble across this topic?
ReplyDeleteI was surprised by how the energy crisis in South Africa can be extremely detrimental to many businesses, specifically the smaller ones that many are dependent upon. Do you happen to know what exactly caused the energy crisis? Is it associated to the lack of past investments by the government, or even possibly the skills deficit and lack of engineers in South Africa?
ReplyDelete