Eskom, South Africa’s state-owned electricity utility, has experienced a continued decline in sales as the private sector seeks alternative sources of electricity supply. In its interim results for the six months ending in September, Eskom reported a 5.9% decrease in sales volumes.
This decline can be attributed to various factors, including supply constraints resulting in load-shedding and load curtailment, as well as lower electricity demand due to challenging economic conditions and the growing trend of embedded self-generation, such as solar photovoltaic (PV) and wind power.
According to research reports, the private sector is expected to effectively replace Eskom’s generation fleet within the next two years. This shift reflects a significant change in the narrative surrounding electricity generation and load-shedding in South Africa, gradually becoming more positive.
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Similar to how private airlines filled the void left by the collapse of South African Airways, the private sector is now stepping in to fill the gap left by Eskom. One notable development is the surge in solar installations across the country.
Outside of the government-procured solar projects, over 4,400 MW of rooftop solar has been installed in South Africa. This figure is projected to increase by 420% by 2030.
Data from Eskom and Professor Anton Eberhard reveals that in the 12 months leading up to June 2023, South African households and businesses installed 4,412 MW of rooftop solar, marking a significant 349% increase from March 2022.
Furthermore, the import of solar panels has reached a new record, with South Africans importing panels worth R12 billion in 2023. This has added 2,200 MW of capacity to the grid.
As a result of this fourfold increase in rooftop solar power generation capacity, Eskom’s revenue has been impacted, with a 2.3% decrease in sales attributed to the growing number of private sector clients relying on alternative electricity sources.
Public Enterprises Minister Pravin Gordhan acknowledges the impact of the surge in solar panel installations, stating that it has contributed to the decline in Eskom’s sales.
This trend highlights the increasing role of the private sector in South Africa’s electricity landscape, as more businesses and households embrace renewable energy solutions.
The rise of private sector electricity generation reduces reliance on Eskom and contributes to a more sustainable and environmentally friendly energy mix. Solar power, in particular, offers numerous benefits, including reduced greenhouse gas emissions, lower electricity costs, and increased energy independence.
While Eskom’s performance has deteriorated in recent years, marked by record levels of load-shedding in 2023, the emergence of private-sector electricity generation brings hope for a more resilient and reliable energy future in South Africa.
As the private sector continues to invest in renewable energy solutions, the country can diversify its energy sources, reduce its carbon footprint, and create a more stable electricity supply.
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