{"id":838387,"date":"2025-09-26T16:00:04","date_gmt":"2025-09-26T14:00:04","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=838387"},"modified":"2025-12-10T17:38:03","modified_gmt":"2025-12-10T15:38:03","slug":"the-dark-side-of-eskoms-miraculous-turnaround","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/energy\/838387\/the-dark-side-of-eskoms-miraculous-turnaround\/","title":{"rendered":"The dark side of Eskom’s miraculous turnaround"},"content":{"rendered":"\n

The latest utility-scale power generation statistics in South Africa, compiled by the Council for Scientific and Industrial Research (CSIR), show that Eskom has staged a miraculous turnaround in 2025.<\/p>\n\n\n\n

However, the utility’s tariffs have been surging above inflation for more than a decade, pushing customers away as it gradually prices itself out of the market.<\/p>\n\n\n\n

The CSIR report covers utility data from 1 January to 30 June 2025, and provides a detailed analysis of load shedding and energy availability during this timeframe.<\/p>\n\n\n\n

As many in South Africa would have experienced first-hand, load shedding was significantly reduced this year, with only 749 GWh shed from the grid, compared to 4,126 GWh in 2024.<\/p>\n\n\n\n

This is a reduction of 82%, reflecting a pretty miraculous turnaround and improved power system performance and supply availability from a utility that was on the brink just two years ago.<\/p>\n\n\n\n

According to the CSIR, the turnaround is a function of three key factors.<\/p>\n\n\n\n

Firstly, Eskom’s generation capacity is up. <\/p>\n\n\n\n

Installed capacity increased by 720 MW in the first half of 2025 compared to the same period of 2024; therefore, energy generated from coal is relatively higher, and additional capacity was added from independent wind and concentrated solar power (CSP) producers.<\/p>\n\n\n\n

Eskom’s capacity is expected to continue to ramp up in the remainder of the year as Kusile units reach commercial operation.<\/p>\n\n\n\n

Secondly, Eskom’s power plant reliability has improved. <\/p>\n\n\n\n

The Eskom fleet energy availability factor (EAF) marginally improved in the first half of 2025 compared to the previous year and reached an annual average of 58%, which is 1% higher than the 57% reached in the same period of 2024.<\/p>\n\n\n\n

Since mid-year, EAF has continued to rise, with the utility hitting over 70% in September and reaching its best performance peak in four years.<\/p>\n\n\n\n

The third factor at play is that Eskom’s peak demand is down.<\/p>\n\n\n\n

“Electricity demand continues to trend down; peak demand is 3% lower in the first half of 2025 compared to the peak demand recorded in the first half of 2024,” the CSIR said.<\/p>\n\n\n\n

This reflects a move away from Eskom by customers, moving to energy alternatives. The CSIR said this was mostly due to the sustained growth of the private sector embedded generation.<\/p>\n\n\n\n

“A combination of lower electricity demand, new generation capacity and a gradual increase in Eskom’s EAF helped to reduce the impact of load shedding,” the CSIR said.<\/p>\n\n\n\n

However, the group did note that the utilisation of diesel generators nearly doubled from an average of 7% in the first half of 2024 to 12% in the same period of 2025, which has also contributed. <\/p>\n\n\n\n

Electricity prices are bleeding South Africans dry<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

Another crucial factor hitting demand is higher electricity prices, which are pushing customers away.<\/p>\n\n\n\n

The CSIR noted that Eskom’s tariffs are going up and exceeding inflation, with the national average tariffs having risen 190% since 2014.<\/strong><\/p>\n\n\n\n

“Increases in the price of electricity prior to 2008 were mostly below inflation. Electricity prices increased significantly in 2008, which coincided with the start of load shedding,” the CSIR said.<\/p>\n\n\n\n

The national average electricity tariff increased by an average of 10% per year from 2014 to 2025, compared to an average inflation rate of 5.2% over the same period. <\/p>\n\n\n\n

With the projected 2026 hike of 8.76% again exceeding the 4.5% Consumer Price Index forecast, the trend is not slowing down.<\/p>\n\n\n\n

Notably, the CSIR pointed out that Eskom’s electricity tariffs are now above the utility\u2011scale solar photovoltaic levelised cost of electricity.<\/strong><\/p>\n\n\n\n

The implemented NERSA tariff increase of 12.74% this year takes the average tariff to c\/kWh 195.93. The proposed tariff escalation of 8.76% will increase the national average tariff to 213.92 c\/kWh in 2026.<\/strong><\/p>\n\n\n\n

This is compared to the levelised cost of renewable generation resources, which range between 50 c\/kWh and 60 c\/kWh<\/strong> for solar PV and wind utility-scale power plants in the REIPPP programmes, the CSIR said.<\/p>\n\n\n\n

Eskom’s sharp tariff hikes have been widely criticised, and the resultant impact on the economy is being factored in to everything from inflation forecasts to the Reserve Bank’s interest rate moves.<\/p>\n\n\n\n

Producer price inflation data out this week flagged the 2026 and 2027 tariffs as sore points for producer costs, likely to push prices higher next year.<\/p>\n\n\n\n

Consumers will face a double-blow, having to suffer the direct costs of the price hikes as well as the higher costs of goods and services as PPI feeds into CPI.<\/p>\n\n\n\n

At its latest meeting, the Reserve Bank flagged the “dysfunction” in administered prices like electricity as a risk factor for inflation, and thus its longer-term view of policy decisions.<\/p>\n\n\n\n

With Eskom’s price hikes likely to push inflation higher in 2026, the Reserve Bank is more cautious about cutting interest rates. However, the longer-term view is to look through the expected spikes and work towards reaching the new “preferred” 3% target.<\/p>\n","protected":false},"excerpt":{"rendered":"

Eskom has staged a miraculous turnaround over the past year\u2014but its electricity tariff hikes are pricing it out of the market and pushing customers to alternatives.<\/p>\n","protected":false},"author":10,"featured_media":777033,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9874],"tags":[4859,1164],"class_list":["post-838387","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-csir","tag-eskom"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/838387","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=838387"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/838387\/revisions"}],"predecessor-version":[{"id":846096,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/838387\/revisions\/846096"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/777033"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=838387"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=838387"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=838387"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}