{"id":872801,"date":"2026-08-31T11:57:00","date_gmt":"2026-08-31T09:57:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=872801"},"modified":"2026-08-31T11:57:46","modified_gmt":"2026-08-31T09:57:46","slug":"eskom-is-coming-after-customers-generating-their-own-electricity-or-buying-from-someone-else-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/energy\/872801\/eskom-is-coming-after-customers-generating-their-own-electricity-or-buying-from-someone-else-in-south-africa\/","title":{"rendered":"Eskom is coming after customers generating their own electricity or buying from someone else in South Africa"},"content":{"rendered":"\n

Power utility Eskom has generated significant profits despite shrinking sales to customers\u2014but its days of double-digit price hikes are drawing to a close.<\/p>\n\n\n\n

Because of this, the group has made it clear that it will secure and retain its revenue by imposing tariffs on customers, including those who self-generate, like solar, or buy power elsewhere.<\/p>\n\n\n\n

“Eskom will retain revenue through network charges, customer wheeling and revised tariff structures, which separate energy charges from the recovery of fixed costs,” Eskom said.<\/p>\n\n\n\n

In its annual financial report for the year ended 31 March 2026, Eskom recorded a profit of over R30 billion, up from the R15 billion profit the year before.<\/p>\n\n\n\n

While the group acknowledged that this higher figure was “distorted” by significant fuel levy rebates totalling R14 billion, it still reflects a massive turnaround from the billions in losses previously.<\/p>\n\n\n\n

The catch in Eskom’s profits is that they come despite the group’s sales declining year-on-year<\/strong>, continuing the trend that began during the load shedding crisis.<\/p>\n\n\n\n

Sales volumes decreased to 178.0TWh (2025: 189.7TWh) during the year.<\/p>\n\n\n\n

While sales declined during load shedding due to Eskom’s inability to generate enough electricity, that issue is largely resolved.<\/p>\n\n\n\n

In 2025 and 2026, Eskom turned its operations around and now carries an energy surplus of between 2 and 3 Gigawatts.<\/p>\n\n\n\n

Instead, the sales decline in 2026 has been driven by once-paying customers turning to their own generation facilities or wheeling electricity from other generators.<\/p>\n\n\n\n

It has also been driven by large industrial users\u2014such as the ferrochrome smelters\u2014shutting down operations due to escalating energy costs and hardship.<\/p>\n\n\n\n

In their place, Eskom’s revenue and profitability have been driven by multiple double-digit increases in electricity tariffs over the years, with the latest being a near-9% hike in 2026\/27. <\/p>\n\n\n\n

Another 9% hike is planned for 2027\/28.<\/p>\n\n\n\n

This has resulted in electricity tariffs rising by nearly 900% since 2008, compared with consumer inflation of around 230% over the same period.<\/p>\n\n\n\n

The result: Eskom’s revenue still grew by 4%, while sales declined by more than 6%, as the burden shifted to the remaining customers.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

End of the road for double-digit tariff hikes<\/h2>\n\n\n\n

Eskom has acknowledged that its revenue path, reliant on tariff hikes, is unsustainable, and the rise of self-generation and wheeling activity is a threat to its future cash flows.<\/p>\n\n\n\n

“Improved generation performance, together with increased customer self-generation and growing wheeling activity across Eskom and municipal networks, has contributed to lower grid demand and periods of excess supply,” it said.<\/p>\n\n\n\n

“This creates uncertainty regarding future electricity sales volumes, revenue recovery and the utilisation of Eskom\u2019s generation fleet, which may affect the achievement of forecast cash flows.”<\/p>\n\n\n\n

To address this uncertainty, the group said it is implementing “a range of initiatives” to address the decline in sales and support demand.<\/p>\n\n\n\n

One of the initiatives includes an amended negotiated pricing agreement framework for industrial users.<\/p>\n\n\n\n

This, it said, will not increase tariffs for Eskom\u2019s broader customer base, require additional borrowings or require further government support. <\/p>\n\n\n\n

However, while the group acknowledged that its revenue growth based on price hikes is unsustainable, this does not mean that customers won’t be hit hard.<\/p>\n\n\n\n

It explicitly stated that it would lean on network charges, customer wheeling and revised tariff structure<\/strong>s to secure revenue.<\/p>\n\n\n\n

Eskom reiterated its commitment to ending double-digit price hikes.<\/p>\n\n\n\n

Despite this promise, the group is still factoring in future price hikes that are at least double the South African Reserve Bank’s inflation target of 3%.<\/p>\n\n\n\n

In an assessment of the group’s cash-generating unit (CGU), the group noted that the CGU’s recoverable amount may be lower than its carrying amount if the long-term price path after 2028 is limited to inflationary increases.<\/p>\n\n\n\n

Because of this, the current path in its forecast sees price increases averaging 6% from 2029 through to 2050.<\/p>\n\n\n\n

However, the group noted that the long-term price path remains a “significant source of estimation uncertainty.”<\/p>\n\n\n\n

This is considering future tariff increases, RCA decisions, the ability to liquidate in the future, revenue recovery mechanisms, and the extent to which tariffs become cost-reflective.<\/p>\n\n\n\n

These are also subject to regulatory approval and future market developments, it said.<\/p>\n\n\n\n

\"\"<\/a>
Eskom’s CGU pricing assumptions in 2026<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"

Eskom’s sales are declining, but its revenue is climbing\u2014but this is not sustainable as the age of double-digit price hikes comes to an end.<\/p>\n","protected":false},"author":10,"featured_media":848606,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2094364084099538991","_sma_facebook_post_id":"191437357620492_2191780984975634","_sma_instagram_post_id":"17940146649090570","_sma_x_attempts":1,"footnotes":""},"categories":[9874],"tags":[1164],"class_list":["post-872801","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-eskom"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/872801","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=872801"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/872801\/revisions"}],"predecessor-version":[{"id":872808,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/872801\/revisions\/872808"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/848606"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=872801"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=872801"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=872801"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}