Relief coming for Eskom customers in South Africa

South Africans may finally see some relief from the relentless rise in electricity tariffs, as Eskom has indicated that the latest double-digit increase could be the last of its kind.

Eskom board chair Mteto Nyati recently acknowledged that the power utility has accepted that future tariff hikes will likely align more closely with inflation, marking the end of a decade-long trend of steep increases that have significantly burdened consumers.

“We are now operating under a new reality,” said Nyati at a briefing in Parliament on Friday (31 January), adding this reality would be marked by “low electricity tariffs” in the future.

Eskom had initially sought even higher hikes through its Multi-Year Price Determination (MYPD6) application, aiming for a cumulative 66% increase over three years.

However, the National Energy Regulator of South Africa (Nersa) slashed these requests, approving only 35% of Eskom’s application over the three-year period.

Despite this reduction, the approved 12.7% tariff increase for 2025 continues the pattern of escalating costs.

This hike will take effect on 1 April 2025 for customers directly supplied by Eskom and on 1 July for those receiving electricity through municipalities, which also add surcharges to cover distribution costs.

To put the rising costs into perspective, a typical Eskom customer using 800 kilowatt-hours (kWh) per month paid around R1,055 in 2014.

Today, that same usage costs R2,948, reflecting a staggering 179.42% increase. With the upcoming tariff hike, the monthly bill is projected to rise to approximately R3,324, nearly tripling the cost from a decade ago.

Looking ahead, with additional approved increases of 5.36% in 2026 and 6.19% in 2027, monthly bills could reach R2,663 more than they were in 2014.

These increases far outpace inflation, which has risen by just 67.8% over the same period, underscoring the financial strain on South African households.

However, Nyati’s remarks during a parliamentary briefing highlighted a significant shift in Eskom’s approach.

“We are now operating under a new reality,” he stated, adding that future increases would be characterised by “low electricity tariffs.”

He acknowledged the growing public demand for tariff hikes to be in line with inflation, citing the financial pressures faced by many South Africans.

This shift comes as South Africa’s energy landscape undergoes a transformation, with renewable energy sources playing an increasingly prominent role.

The cost of generating power from solar photovoltaic (PV) and wind energy has declined steadily since 2011, making it challenging to justify inflation-beating increases.

Energy Minister Kgosientsho Ramokgopa noted that while residential customers currently pay around R2.49 per kWh, solar PV projects have achieved costs as low as 56 cents per kWh, and onshore wind projects are at approximately 62 cents per kWh.

End of load shedding

Nyati expressed confidence that load-shedding could become a thing of the past by the end of March 2025.

This optimism is rooted in the successful implementation of Eskom’s two-year recovery plan, initiated in March 2023.

The plan includes critical milestones, such as synchronising Kusile Unit 6 and bringing Medupi Unit 4 back online.

Combined with the completed summer maintenance, these efforts are expected to secure a load-shedding-free winter.

Despite a recent setback that ended over 300 days without load-shedding, Eskom has managed to suspend power cuts again.

The utility described the temporary Stage 3 load-shedding as the result of a “perfect storm” of unit breakdowns and delays in returning offline units to service.

However, with structural improvements in place and a focus on efficiency, Eskom appears poised to meet electricity demand more reliably in the future.

As South Africa moves towards a more diversified and cost-effective energy mix, the prospect of stable tariffs and an end to load-shedding offers a glimmer of hope for consumers long burdened by soaring electricity costs and unreliable supply.