The Power Vacuum: The Effect of the Electricity Power Crisis on GDP in South Africa in the Context of an Uncertain Coal Supply

ABSTRACT Electricity production by the Electricity Supply Commission of South Africa (Eskom) is the most important beneficiation process for South African coal. As one of the world’s lowest cost producers, energy-intensive industries such as ferroalloys and aluminium were introduced. However the poor were neglected. The white paper on energy policy (Department of Minerals and Energy, 1998) sought to redress this. Also, chasing economic growth to generate jobs resulted in high electricity demand and interruptions. Lifespan estimates of South African coal reserves based upon peak theory vary widely. Approaching peak, coal production in the future will be more expensive and, thus, contribute to more expensive electricity, which could inhibit industrial development unless South Africans work smarter.