The limitations of South Africa’s national electricity grid have constrained industrial development in South Africa.

Absa Capital research MD Jeff Gable said on Wednesday that insufficient infrastructure contributed to the nation’s lagging growth over the past few years, citing electricity constraints as a major inhibitor.

The country’s economy, measured at 21 000 GWh, was currently larger than electricity supply, which was estimated at under 20 000 GWh, leaving South Africa no capacity to grow.

Gable commented that, in future, a key challenge would be the possibility of South Africa’s electricity system reaching a critical point before new capacity could be added.

The Department of Energy was currently driving South Africa’s Renewable Energy Independent Power Producer Procurement Programme, which would see 3 725 MW of renewable-energy capacity added to the grid by 2016, while State-owned power utility Eskom’s new build programme planned to add an additional 16 304 MW in power station capacity by 2017, through projects such as Kusile and Medupi.

Eskom had initiated several energy-savings initiatives, including a power buy-back programme, requiring industrial users to cut energy consumption on demand during tight energy margins.

The utility had, last week, implemented an emergency declaration, which had since been lifted, that required key industrial users to cut 10% of their energy load and consumers to “urgently” switch off nonessential appliances, as the national grid edged closer to overcapacity.

This was said to be the first emergency protocol issued since Eskom had been unable to prevent national rolling blackouts during the 2008 power crisis, when the national grid nearly collapsed, forcing Eskom to implement “load shedding” measures, resulting in mines and smelters having to shut for days. The power cuts lasted hours at a time and the disruptions associated with this were reported to have cost the economy an estimated R50-billion.

Further, the impetus South Africa had gained post the 2008 financial crisis, leading to 3% to 3.5% growth, had waned, with growth now cut to 2% on the back of electricity constraints and labour strife, besides others.

However, South Africa’s infrastructure challenges extended beyond electricity, Gable added, referring to constraints in bulk transport, rail and ports, besides others.

South Africa had embarked on a President Jacob Zuma-led multibillion-rand infrastructure programme to mitigate these challenges and stimulate growth.

Two weeks ago, the proposed Infrastructure Development Bill, aimed at fast-tracking the implementation of the government's Infrastructure Development Plan, was introduced to National Assembly.

The proposed Bill would formalise and establish the powers of the Presidential Infrastructure Coordinating Commission (PICC).

The PICC had identified and would seek to coordinate 18 Strategic Integrated Projects, which constituted hundreds of separate construction projects, to further develop capacity in South Africa.