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Self-generation may be added to data set, says statistics agency

27th January 2023

By: Bloomberg

  

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South Africa’s statistics agency is considering including self-generated power in its monthly electricity generation data as more households and businesses reduce their reliance on State-owned utility Eskom.

Adding the metric would broaden a key indicator used by economists to compile estimates of gross domestic product (GDP) at a time when consumers are being forced to find alternative sources of energy because Eskom’s old and poorly maintained plants cannot cope with demand.

“We actually need to find a smarter way to measure the electricity that’s self-generated, because at the moment our monthly survey covers Eskom mostly and there’s about 20 other smaller power stations,” Joe de Beer, deputy director-general of economic statistics at Statistics South Africa (Stats SA), said in an interview in the capital, Pretoria. The agency currently does not measure how much power is generated by shopping centres, big mines and manufacturers that use solar plants, he said.

A surge in manufacturing output in September despite the worst month on record of loadshedding — the local term for planned outages — suggests companies may be relying more on alternative sources of power supply during blackouts, said Peter Worthington, a senior economist at Absa Bank.

Better-than-expected third-quarter economic growth of 1.6%, compared with a contraction of 0.7% in the prior three-month period, may also point to industries using alternative energy sources.

“Economic activity was reasonably firm in electricity-intensive sectors during peak loadshedding months, indicating a higher level of backup usage and alternative sources of energy coming on stream,” said Sanisha Packirisamy, an economist at Momentum Investments. “That, together with a structural decline in energy intensity in South Africa, can explain the difference.”

The South African Reserve Bank said last month that record power outages mean the economy likely expanded by 0.1% in the final quarter. It predicts GDP growth will slow to 1.1% in 2023 from 1.8% in 2022 and it assumes increased power rationing will shave 0.6 percentage points off output.

Edited by Bloomberg

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