Eskom’s latest load shedding milestone

 ·21 Jan 2025

Power utility Eskom has managed to keep the lights on nationally for 300 days, marking a nine-month milestone without load shedding.

The group said that the milestone is thanks to the ongoing implementation of its Generation Recovery Plan, which involved high levels of maintenance and continual improvement of the utility’s generation fleet.

The plan has been ongoing since March 2023, the year that South Africa experienced the worst levels of outages in history, hitting up to stage 6 load shedding.

Bheki Nxumalo, Group Executive for Generation, said the turnaround can be credited to the 40,000 Eskom workers who committed to digging the company out of crisis.

As a result, the power utility has seen a notable improvement in energy availability (EAF), a reduction in breakdowns and less reliance on expensive gas turbines.

Nxumalo noted that diesel expenditure has been reduced by R16.42 billion, leading to massive savings. These savings will now be reinvested back into the business to drive even more efficiency.

“Our sights are now firmly focussed on delivering one year without load shedding at midnight on 26 March 2025,” he said.

Eskom group CEO Dan Marokane said that the turnaround at Eskom has brought relief to businesses in the country, boosting confidence, and driven far more positive sentiment, boosting growth prospects up to 2%.

Further, the more stable operations are also putting the notoriously loss-making group onto the path of long-term financial and operational stability, he said.

The group’s latest financial report, published in December 2024, recorded a staggering R55 billion after-tax loss for the 2024 financial year.

However, the group is far more optimistic about FY2025, where it anticipates a significant swing into profit – currently projected at R10 billion.

It is worth noting that the expected profit for FY2025 is also being driven by the group’s massive price hikes.

For FY2025, it is benefitting from a nearly 13% hike in tariffs that came into effect from April 2024.

In 2025, the utility applied for a 36% hike, followed by a 2% hike in 2026 and a 9% hike in 2027.

Not out of the woods

While Eskom’s nine-month milestone is an important one, the group has been reticent to call it the end of load shedding.

Its own forecasts still err on the side of caution—projecting possible supply shortfalls in the coming months—while its summer outlook has load shedding on the menu.

Speaking to BusinessTech, the group said that this is not the likely outcome, and at current levels, load shedding will be kept at bay, but it is still a risk that has to be factored in.

The winter outlook will take the summer performance into account and adjust accordingly, it said.

On the financial side, Eskom also has some risk factors on the horizon.

While the group is anticipating a return to profit in FY2025, things look murky further down the line, particularly if one of its most pressing crises is not addressed: municipal debt.

Eskom has seen municipal debt surge in the past few years, projected to hit over R100 billion in the near-term.

If this is not dealt with in some way, the group will have to keep applying for massive tariff hikes to cover the shortfall.

Failing that, the R250 billion bailout—via debt take-over—from the government will eventually lead to naught, and the utility may find itself cap-in-hand at Treausry’s door.

Operationally, however, the prospects are far more positive, with Kusile Unit 6 expected to hit commercial operation in mid-2025 and Medupi Unit 4 also expected to return to service by March 2025.

The added capacity will be further nails in the coffin for load shedding.

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