The effects of load shedding will be devastating for the local economy, and more job losses can be expected, warned local businesses the past week. The expectation is also that food inflation will skyrocket, causing even more misery for consumers.
Limpopo Mirror spoke to several local businesses the past week to try and determine the gravity of the situation. The production sector is especially badly affected by the power cuts, which went up to stage six the past week, meaning that the electricity was off for more than ten hours per day.
Mr Tobias Fourie, managing director of Limpopo Dairy, says that businesses will not be able to absorb the losses much longer. Limpopo Dairy is one of the biggest dairies in the northern part of the country. Apart from the dairy, they also run a factory where products such as yoghurt, fruit juices and liquid grain products are produced. The total electricity consumption at the farm, the factory and the various buildings is roughly 2 MWh.
When load shedding kicks in, Limpopo Dairy must use alternative sources of energy, because the various operations cannot stop. Fourie mentions that they run a 24-hour operation and even though they try and plan around the power interruptions, this is not always possible. The company started investing in renewable energy some time ago, but this is not enough to provide in the demand. The solar farm that was installed delivers 540 kWh on a sunny day, but they must then rely on an 800 kVA generator to keep the lights on and the refrigerators cold. During December, this generator broke down and now needs to be replaced at an estimated cost of R2,5 million.
Fourie points out that for a business to make use of electricity supplied by a generator is extremely expensive. He says that, on average, a generator produces power that costs between R6 and R9 per kWh. When consumers buy electricity directly from Eskom, the cost is roughly R1,80 on a standard tariff.
Fourie is very worried about the effects this will have on especially small businesses. These businesses must absorb all the losses, such as food that gets spoilt because the cold chain is broken. Most local businesses simply do not have the capacity to install expensive systems as a backup when the power is off.
The farming sector is also badly affected by the load shedding, as they cannot irrigate lands. Mr Fritz Ahrens, chairperson of the Louis Trichardt Farming Association, says that farmers have to rely on generators, but this comes at a huge cost. Several farmers have started to invest in renewable energy sources, trying to move away from a dependency on Eskom power.
Ahrens is especially worried about the smaller subsistence farmers. He believes they will suffer the most from what is currently happening with the energy crisis. He also believes that the current crisis will inevitably lead to higher food prices and severe job losses.
(See accompanying reports on this website on the effects load shedding has on small businesses from different areas in Vhembe)