(Bloomberg) – An electricity-supply crisis is looming in South Africa that could make intermittent outages in the past few months seem trivial by comparison.
Eskom Holdings SOC Ltd., which supplies almost all the nation's power, will lose more than a quarter of its current generating capacity over the next decade as it shuts aging coal-fired plants. Replacing that output and adding capacity needed to meet rising demand will take years and cost more than R1trn ($71bn), according to government estimates. The problem is likely to worsen exponentially after 2030 as more plants reach retirement age.
While Eskom is building two new plants, Medupi and Kusile, they are running years behind schedule and billions of rand over budget, and won't be enough to plug the supply gap. The utility has limited scope to invest in more projects because it isn't making enough money to cover its operating costs and service its debt, which had ballooned to R419bn at the end of its last financial year.