January 25, 2008 (AP) – South Africa will ration electricity, increase prices and encourage a switch to solar energy, all part of emergency measures now being undertaken amid power outages that have caused chaos and misery nationwide and threatened to choke economic growth.
Neighbors like Botswana and Namibia, which rely heavily on South African energy exports, have also been badly hit by the disruptions in the region’s economic and political powerhouse. The outages have undermined confidence in South Africa, with more incidents like the stranding of hundreds of people on tourism icon Table Mountain spreading through the media to other countries.
South African businesses have been crippled by the outages, which usually occur without warning. In an indication of the severity of the crisis, major mining companies including AngloGold, Harmony and Gold Fields Ltd. suspended work at some of their mines Friday for fear power cuts would trap workers underground.
Gold Fields said it stopped all its South African operations, including in the world’s biggest gold mine, which produce 7,000 ounces per day. The trade union Solidarity said nearly 30,000 miners on the morning shift were effected. The company said that energy provider Eskom had warned that the disruption could last up to four weeks. Gold prices reached record highs this month.
“The unprecedented unplanned power outages must now be treated as a national electricity emergency situation that has to be addressed with urgent, vigorous and coordinated actions,” Public Enterprise Minister Alec Erwin told journalists.
“We are viewing the next two years as being critical,” he said. In two years, South Africa will be hosting the World Cup finals, expected to draw more than 300,000 visitors.
The South African Tourism Services Association said earlier this week that the crisis jeopardized the World Cup.
“Will people come to SA to see them if they know they will be going back to hotels and guest houses with no power?” That means no hot meals, no clean laundry, no lights,” said Michael Tatalias of the tourism association.
The government and Eskom say that the economy has grown too fast to cope with new energy demands and the nation must cut use by 10 percent to 15 percent. The government has acknowledged for the first time it shares some blame for ignoring a 1998 Eskom report warning of a serious energy crisis within 10 years. The government gave the go-ahead to a new power station building program in 2004.
“The president has accepted that this government got its timing wrong,” Erwin said.
But he said that the government was not considering freezing planned electricity-gobbling industrial projects, like a big new aluminum smelter, as had been suggested by Eskom.
Minerals and Energy Minister Buyelwa Sonjica said South Africa, which has until now relied heavily on its cheap and abundant coal for electricity, would put more effort into developing renewable energy.
The government was also considering emergency measures to compel South African mines to supply the state utility Eskom with more and better coal rather than exporting it.
“If they don’t give us the coal, they don’t get the electricity,” said Erwin.
Minister Sonjica said the government is studying countries like Brazil and Cuba that have rationed energy. South Africa is now considering quotas and fines for exceeding allotted energy use, Sonjica said.
Sonjica also said the government hoped that a million solar water heaters would be installed in the next three years and that measures were being considered to oblige hotels, hospitals and other institutions to use solar power for water heating.
Traffic lights would be switched to solar power. Cape Town has pioneered a successful experiment, helping to minimize traffic snarlups now being caused by signal failure.
Electricity prices, which are expected to rise 14 percent this year, will likely continue to rise by a similar margin for the foreseeable future, said Erwin