Business Day column: ‘Turn on your heaters and geysers’

05 August 2015
Views 1 989


DREAM of a country where incomes double every decade, power shortages become surpluses, the rich get richer and the poor get richer faster, and unemployment is uncommon. Such countries exist. We could be one of them.

If you want your dream to happen, one of your moral and patriotic duties is to maximise electricity consumption. Every watt you save conceals the extent of our catastrophe. Prosperity coincides with higher electricity consumption. Are you perpetuating and deepening the catastrophe, and worsening poverty, by reducing consumption? Are you part of the cover-up? Or are you forcing the government to unbundle its failed Eskom monopoly and subject it to competition?

Dream of an SA in which, instead of enduring daily blackouts, incredulous schoolchildren learn about them in history classes. They learn about how countries such as India, China, Mauritius and Indonesia went in a few years from daily shortages to surpluses, and how SA learnt from and emulated them. They are taught that, in such countries, growth in electricity capacity exceeded and contributed to the world’s highest economic growth rates. "Under apartheid," they learn, "the government relegated blacks to bantustans, banned integration, and created oppressive monopolies. The most disastrous was Eskom, which made everyone poorer and wasted wealth on an unimaginable scale. Historians have no idea why the post-apartheid government perpetuated the failed monopoly."

Now stop dreaming. Dreams become reality when you do the right thing. Turn on your heaters and geysers. Stop wasting money on energy-efficient technology. Demand an end to the farce.

In 2011, President Jacob Zuma told 10,000 people in the Eastern Cape town of Engcobo that "we are still on track to meet the target of electricity in all households by 2014". Instead of more electricity, we have less.

No one knows how much the catastrophe costs. In the absence of econometric estimates, we can speculate. We have about 6-million electrified households. If they would pay R50 each to not have a blackout, and there are two a week, we are R30bn poorer. We have half a million companies. If each would pay R1,000 an hour to not have blackouts, and each lasts three hours, we are another R30bn poorer. There are about 50 "intensive energy users" (IEUs). They consume about 50% of our electricity. If they would pay R1m an hour, we lose an extra R15bn. If we assume that the average household, with Eskom subsidies, spends R500 a year on electricity-saving technology — gas cookers, low-energy lighting, emergency LED lamps, diesel generators, geyser timers, improved insulation, etc. — we lose a further R3bn. If the companies spend 10 times more than households, we lose another R2.5bn. Add the same amount for IEUs and we have another R2.5bn.

That leaves us R83bn poorer every year, in addition to our economy being more than R600bn smaller due to electricity insufficiency. Experts are likely to regard these numbers as underestimates in areas of their expertise.

It gets worse. Traffic is slowed and accident rates rise during blackouts. Crime increases and health services are compromised, according to Cape Town city councillor Siyabulela Mamkeli. Health24 reports that "businesses and households struggle" during blackouts, but that "the risks … for hospital patients are far greater." A baby died in a Kimberley hospital when a ventilator failed because of a blackout.

If you dream of ending rather than perpetuating the farce, if you want to force the government to implement its own policies — unbundling Eskom and subjecting it to competition — there is practical advice everywhere. Google "how to save electricity" or ask Eskom what to do, and do the exact opposite.

• Louw is executive director of the Free Market Foundation

This article was first published in Business Day on 29 July 2015



Comments on Business Day column: ‘Turn on your heaters and geysers’