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South African Energy Crisis Triggers Declaration Of State Of Disaster

South Africa is now in a “state of disaster,” according to South African President Cyril Ramaphosa, who made the declaration on Thursday due to the country’s raging energy crisis.

President Ramaphosa referred to the energy crisis on Thursday in the annual State of the Nation Address as “profound,” adding that the seeds of it “were planted many years ago.” 

The power cuts—or rolling blackouts—by South Africa’s state-run utility Eksom are daily and are reportedly the worst in its history. The blackouts have hit businesses and industry in the country, and are expected to cut into the country’s economic growth by 2 percentage points.

South Africa has experienced blackouts every day so far this year in what some are calling “a permanent new reality”. It has suffered some form of chronic power outages for the last 15 years. Food retailers, wineries and vineyards, and some in the industry are turning to costly measures to make up for the power outages such as emergency generators and solar panels.

The government has been called upon to intervene before shortages of food and medicine and other essential goods take hold, and cautioned that the state of disaster would not resolve the energy crisis.

South Africa’s energy crisis is largely brought on by supply shortages due to aging coal-fired power plants. Eksom has 14 coal-fired power stations responsible for supplying 80% of South Africa’s power. Many are old, most have not been maintained properly, and the company is deep in debt. South Africa has grand plans to retire 12GW of its coal-fired power fleet within the next seven years, but the country’s newest plants, Kusile and Medupi that were fired up last year were plagued with severe cost overruns and are still not operating at full capacity.

By Julianne Geiger for Oilprice.com

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