Explainer: What does it mean when Eskom implements Stage 4 loadshedding?

- The power utility has imposed stage 4 load shedding

- The power outages are sure to severely kneecap the economy

- Reportedly, the load shedding is the result of the failure of 6 of ESKOM's generating units

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ESKOM has implemented stage 4 load shedding throughout the day.

The announcement of the power outages came after 6 generating units were reportedly lost.

As a result, the power utility said that stage 4 load shedding was needed to prevent a total blackout. But what exactly does it mean?

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Stage 2 load shedding means that 2000 megawatts are shed on a rotation in a certain period of time. Stage 4 load shedding is double stage 2. In a nutshell, it means that load shedding will occur 12 times over four days for 2 hours at a time, or 12 times over eight days for 4 hours at a time.

So how will this affect the economy?

According to experts, stage 2 load shedding took a R2 billion toll on South Africa's economy for every day it was implemented. Stage 4 load shedding could cost double that. 

But while those are the daily costs, load shedding also causes harm to the economy into the future, such as by reducing quarterly GDP growth.

Similarly, power outages tend to frighten foreign investors, and lead to less money being injected into South Africa - something which Cyril Ramaphosa has said is key to reinvigorating the economy.

Additionally, the blackouts hit vulnerable small business especially hard, as they generally do not have the resources to cope with the outages. 

So why is the load shedding happening?

While ESKOM claims 6 generating units have failed, the reasons for ESKOM's energy shortages stretch back to at least 2007, when the power utility was warned that it needed to build 20 new coal mines to avoid a coal shortage.

As of December 2018, no mines had been constructed.

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During his SONA speech, Ramaphosa announced plans to overhaul ESKOM and divide it into three entities. However, it remains to be seen whether this can be implemented soon enough to prevent further significant damage to the economy.

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Source: Briefly News