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Why Blackouts Are Still Crippling South Africa

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South Africa has been crippled by rolling blackouts since 2008 because its state-run, dilapidated power plants couldn’t keep pace with demand. Eskom Holdings SOC Ltd., the country’s near-monopoly electricity supplier, has been central to the meltdown, with a legacy of poor management and financial losses leading to a series of bailouts. Outages have hit record levels in 2022, and the government is turning to private power producers to help resolve the crisis. 

South Africa was producing more electricity than it needed when White-minority rule ended in 1994, but the government didn’t foresee how sharply demand would surge as the economy expanded and previously neglected areas were connected to the grid. Eskom invested in several multibillion-dollar plants after the authorities awoke to the severity of the problem in the mid-2000s, but the projects came too late and took too long to build. The Medupi and Kusile coal-fired plants, two of the world’s biggest, were supposed to come on line in 2015, but ran way behind schedule and over budget. Eskom’s other plants are on average more than four decades old. The shortages are a huge risk to smelters, mines and other energy-intensive businesses.