Stage 6 load shedding in the recent few weeks was a harsh wake-up call to all South Africans as we were once again reminded of the perfect storm of challenges experienced by Eskom.

As the Western Cape government, we are also grappling with the challenges Eskom is presenting. Electricity generation is still a national responsibility, but it affects people on a local basis. We are focusing on the immediate challenges from a disaster management perspective. But we are also looking at where we want to position the Western Cape going into the future.

Economic growth and jobs are our guiding light in this regard, and for us, it is very clear that a province that can offer clean, reliable, and affordable energy will have a distinct competitive advantage over other regions competing for capital investment.

Before one can have a debate about the energy situation, it is necessary to fully grasp the huge cost of our current unreliable energy situation.

Figures vary widely on how much diesel Eskom is burning as an emergency measure. At the one extreme, Eskom’s Chief Operating Officer, Jan Oberholzer, said that during Stage 4 load shedding Eskom is burning through nine million litres of diesel a day. According to our calculations, this equates to around R160-million per day.

It is difficult to determine how often this is the case, and, on the other side of the spectrum, different sources report much smaller, although still huge, calculations of R25-million per day.

To put these numbers into context: as part of our Integrated Development Planning process, we plan and budget for basic infrastructure such as schools, hospitals, fire stations and police stations in the various municipalities in the province. Figures from a 2021 planning document reveals the costs for such projects:

• A community health centre will cost R70-million;
• A fire station will cost R60-million;
• A police station will set you back R50-million;
• A secondary school can be built for R80-million;
• A Primary School will cost R60-million; and
• A small rural crèche can be constructed for approximately R2-million.

If we include the estimated economic damage caused each time there is load shedding, the costs of Eskom to South Africa becomes much larger. Calculations done by Alexander Forbes Chief Economist, Isaah Mhlanga, puts the cost to South Africa’s economy of Stage 6 load shedding at R4-billion per day.

If we use that number as a reference, it translates to a cost of R500-million per day for the Western Cape. That is 10 new police stations per day, or six secondary schools per day that we are not constructing in the Western Cape alone.

There are many other costs associated with load shedding: Research by the International Energy Agency points to the negative link between thermal discomfort — people being too hot or cold — and mental health. There is also a well-established link between the lack of access to clean energy and air pollution, with associated deaths due to respiratory diseases.

Studies on occupational health and safety show how energy efficiency in work environments affects business bottom lines, but also contributes to general health and wellbeing. Much of the technology associated with this field is reliant on Eskom for reliable electricity supply.

And Dr Johan Burger from the Institute for Security Studies says there is a correlation between criminal activities and load shedding.

The energy situation is also complicated by consumer behaviour. Data from the City of Cape Town shows that usage of higher income households has dropped significantly since 2008. The data shows household electricity consumption dropping from more than 1,200kwh per month in 2008, to just over 600kwh per month in 2021. This can be attributed to people installing backup systems or leaving the grid completely.

This holds serious financial implications for municipalities and the way they incorporate the distribution of electricity as a source of income in their financial modelling.

On the other side of the spectrum, poor households are constantly consuming approximately 200kwh per month over the same period from 2008 to 2021. These households cannot afford the alternatives employed by high-income households, and therefore suffer the full brunt of the negatives associated with load shedding.

The same City of Cape Town study shows a predicted population increase of 400,000 people from 2020 to 2025 for the metro. If we incorporate population growth trends into this data, we are seeing low-income households, earning less than R13,000 per month, representing 76% of these new residents.

In other words, Cape Town — and the same would apply for any other metro or growing town in South Africa — must plan for an increase in population, but with a small percentage of people able to pay for electricity. Addressing these service delivery challenges are difficult enough on its own, but the additional costs Eskom is adding to the equation through its unreliable delivery is threatening our future as a country, and as a province.

Western Cape initiatives

Our immediate response to the Stage 6 load shedding is from a disaster management perspective. The Western Cape Disaster Management Centre (PDMC) was activated, and all municipalities were asked to report on their backup systems. We are focusing on pumps and systems needed for basic services such as water and sewerage. Also, we want to be assured that emergency services are prepared and equipped to function during times of extended load shedding. As such, diesel levels of all backup generators at our hospitals are monitored on a real-time basis.

I also wrote to Dr Nkosazana Dlamini-Zuma, the National Minister of Cooperative Governance and Traditional Affairs, asking for a nationally coordinated disaster management response.

More recently, we called a special Cabinet meeting where PDMC, the City of Cape Town and the Provincial Department of Public Works presented on load shedding and efforts to minimise the disruption to service delivery.

There is also a long-term perspective: The Western Cape has for more than a decade been advocating for a green energy future. GreenCape, a non-profit organisation was established in 2010 to drive the widespread adoption of economically viable green energy solutions in the Western Cape. 

Another initiative is the Municipal Energy Resilience (MER) programme, which aims to enable 500MW of new low-carbon energy generation in the Western Cape by 2025. As part of the MER programme, local governments are supported to create the legal and institutional frameworks to be ready to engage and transact with independent power producers.

Significant time is currently being spent on the enablement of electricity wheeling on municipal grids, which will allow private sector entities to transport power over the grid to other businesses, organisations, or facilities, while ensuring that costs are allocated correctly to ensure municipal revenue sustainability.

We have supported the development of wheeling frameworks and wheeling tariff applications in seven Western Cape municipalities and both George Municipality and the City of Cape Town are currently running wheeling pilot projects. 

We also continue to drive the uptake of rooftop PV at the private and household level. Currently, 21 out of 24 local municipalities in the Western Cape are allowing small-scale renewable energy onto the grid. Twenty of these municipalities have feed-in tariffs that allow households and businesses to be compensated for feeding their excess energy back into the municipal networks. 

Over the last financial year, significant work has been done on unlocking municipal direct procurement of renewable energy from Independent Power Producers (IPPs). The next step is to support municipalities through the phases of feasibility studies, procurement and contracting with IPPs. 

We are also focused on the exploration of a potential municipal pooled-buying facility, to address risks and economies of scale. 

To support all the above work, the Western Cape MER Fund is currently supporting 13 preparatory studies at eight Western Cape municipalities. The Department of Local Government is also supporting a further three municipalities. These studies include electricity master plans, energy master plans and cost-of-supply studies. 

But for now, we are calling on all people to help the country by reducing their individual electricity usage, especially during peak times. DM