afrol News, 26 August - Cost of energy shortage in South Africa has been estimated to be over R50-billion, National Energy Regulator of South Africa (Nersa) reported today.

Speaking at a conference on mining and metallurgical industry's response to power crisis, Nersa CEO Smunda Mokoena explained that economic impact of load shedding had been costed at R75 per kWh.

"The supply shortage caught South Africa by surprise," added Mr Mokoena.

Nersa inquiry has also found that power utility Eskom had responded appropriately and speedily to power-supply shortage towards end of 2007 and going into 2008.

But while Nersa was aware of low reserve margins, that the mothballed plant and low lead time open-cycle gas turbines were being commissioned, and that low demand mid-summer period would be used for maintenance, regulator was unaware of increased unplanned power cuts and dwindling coal stocks leading up to virtual blackout in January.

What Nersa has identified is a potential conflict of interest between generator of electricity and system operator, which is effectively responsible for ensuring system security.

"We are very sceptical that current procurement is being done by Eskom, not by government," Mr Mokoena said.

Procurement of generation capacity, including that from independent power producers and co-generation, should be managed and coordinated by a professional agent independent of Eskom, he further said.

"The sooner we establish an independent power procurer the better," he added.

Meanwhile, Statistics South Africa has said that the country's gross domestic product has accelerated to 4.9 percent in second quarter of 2008 from 2.1 percent in first quarter, which was as a result of declines in manufacturing and mining related to an electricity crunch.

"Mining and manufacturing output recovered in latest quarter after electricity shortages hit production earlier in year," said analysts at RBC Capital Markets in a research report.

Economists had also expected the economy to grow 4.2% in the second quarter.

Investment Solutions economist, Chris Hart, said figure emphasised that South Africa had a "two-speed economy".

"Some sectors face recession if they are not in recession already, but others are showing good growth. Agricultural industry for example has seen tractor sales up 50% despite fall in vehicle sales. Strong upsurge in agriculture suggests that sector is positioning itself to take advantage of high food prices," Mr Hart said.

By staff writer

© afrol News

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