Experts say the South African economy is being held back by the country’s energy crisis.

A range of problems linked to management weaknesses at national and company level have been blamed, with little prospect of improvement in the near future. Experts suggest that other forms of power such solar, nuclear and shale energy may be needed.

Anton Eberhard, an infrastructure reform and regulation professor at the University of Cape Town told Sapa that investment in new power plants has come too late. Eskom has undertaken construction on three coal-fired stations which will increase the country’s generation and transmission capacity by 17 000 megawatts.

The population growth, which is estimated to reach 68 million by 2013, is resulting in strong demand for energy. Eskom has been under pressure to boost capacity and rejuvenate an ageing power grid following the widespread blackouts in 2008. The security of supply is still under threat and tariffs have trebled in the five years from 2007.

Energy Minister Ben Martins, says the increase in electricity tariffs has had an adverse effect on the growth of the economy, contributing to rising inflation. This may have made some industries economically unviable and affected service delivery at municipalities. He says that 440 000 small businesses have been forced to close as a result of the electricity increases.

“The limited capacity of South Africa is inhibiting the growth of the economy,” says Chris Yelland, an energy analyst. Eberhard believes South Africa is facing very serious challenges over the next few years. “[The] extent to which we can grow quickly now is constrained by inadequate electricity supply,” he says.

Yelland believes some of the problems are structural while others are political or simply bad management. “The bottom line is Eskom is not structured appropriately.” He suggests transmission be outsourced to independent operators with distribution managed by a smaller number of financially viable outfits.

CEO of Talesun Energy Arthur Chien believes the answer to the increasing demand is photovoltaic (PV) power. “With the sun providing a tremendous resource for generating clean and sustainable electricity, without toxic pollution or global warming emissions, solar makes good sense, especially as the cost of PV solar power is so much more affordable than power generated from coal, shale gas, oil or nuclear,” he says.