Mercado Released [20 April 2015]: Electricity production expansion has been lagging the economy growth
Electricity production expansion has been lagging the economy growth – putting pressure to the already old existing power generation plants. Since 1994 a total of 6 million households have been added to the national grid. We believe addition of these households to the grid is not a major cause of power shortages because Eskom’s sales to residential users only increased by 3.5% from 1.5% in 1994 to 5.0% in 2014. The manufacturing and mining industries account for above 58% of the total electricity generated. However, over the medium to long term, the country’s solution on power hangs on the generation expansion projects that have been rolled out. The key projects are the 4 764MW Medupi, 4 800MW Kusile and the 1 332MW Ingula power stations. On a positive note, Medupi’s Unit 6 was successfully synchronised to the national grid on March 02, 2015. Unit 6 produces 794MW of electricity. We remain positive that more power generating alternatives will come to play – mitigating to some degree the current shortages from Eskom’s plants.
For more on the economy read this week’s NMG Mercado here