Rapid electricity supply diversification in municipalities is the key to economic recovery, municipal financial sustainability and a permanent end to load shedding

The policy brief examines the devastating socioeconomic and financial impacts of load shedding in South Africa, highlighting a cumulative 15 percentage point loss in GDP growth from 2020 to 2023. It argues that the current reliance on Eskom's aging coal fleet and proposed nuclear projects is insufficient and too costly. Instead, it advocates for municipalities to leverage solar PV and battery energy storage systems (BESS), which are significantly cheaper and faster to deploy, to increase electricity supply and reduce bulk purchase costs.

• Load shedding has caused severe macroeconomic damage in South Africa, with an estimated cumulative loss of 15 percentage points from GDP growth between 2020 and 2023, and a total economic cost of R224 billion for the same period.
• Load shedding destabilises municipal finances by reducing electricity revenue and increasing infrastructure repair costs. In the 2022/23 fiscal year, electricity revenue contributed just under 32% of operating expenditure, compared to a design assumption of 37%, creating a revenue gap of R24 billion.
• South Africa's electricity supply is declining due to the aging coal fleet's falling energy availability factor (EAF). In the first six weeks of 2024, the EAF was below 55%, declining to just above 51% by week six.
• Nuclear power is an impractical solution for rapid supply increases due to long construction times—averaging nine years globally—and high costs. At a 10% discount rate, nuclear is approximately four times more expensive than renewables.
• Utility-scale solar PV is the most cost-effective and rapid way to increase supply. By 2024, solar PV was 43% cheaper than Eskom's production, and it is estimated that by 2030, solar PV costs will be less than one-third of Eskom's costs.
• Battery Energy Storage Systems (BESS) can significantly reduce municipal costs by offsetting Eskom's high demand peak tariffs. In 2024, the gap between the high demand peak tariff and the BESS rate was R2.90/kWh.
• A 22–24% share of renewables combined with battery storage could have saved South Africa's eight metros a combined R5 billion per annum on bulk purchases in the current financial year while largely eradicating load shedding.

APA

T., L. (2023). Rapid electricity supply diversification in municipalities is the key to economic recovery, municipal financial sustainability and a permanent end to load shedding. Public Affairs Research Institute. https://pari.org.za/wp-content/uploads/2023/12/20240419_Municipal-policy-brief.pdf

Chicago

T., Ledger,. Rapid electricity supply diversification in municipalities is the key to economic recovery, municipal financial sustainability and a permanent end to load shedding. Public Affairs Research Institute, 2023. https://pari.org.za/wp-content/uploads/2023/12/20240419_Municipal-policy-brief.pdf.

Wikipedia

{{cite report |last1=T. |first1=Ledger, |title=Rapid electricity supply diversification in municipalities is the key to economic recovery, municipal financial sustainability and a permanent end to load shedding |publisher=Public Affairs Research Institute |date=November 2023 |url=https://pari.org.za/wp-content/uploads/2023/12/20240419_Municipal-policy-brief.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{t2023rapid, author = {T., Ledger,}, title = {{Rapid electricity supply diversification in municipalities is the key to economic recovery, municipal financial sustainability and a permanent end to load shedding}}, institution = {Public Affairs Research Institute}, year = {2023}, month = nov, url = {https://pari.org.za/wp-content/uploads/2023/12/20240419_Municipal-policy-brief.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }