Eskom blunder keeps load-shedding alive

Eskom’s reliance on load reduction as a cover for load-shedding, instead of fixing overloaded substations and incentivising alternative energy solutions, is prolonging South Africa’s power crisis.

This is the view of Sinan Energy CEO Mohamed Madhi, who told Newzroom Afrika that load reduction also discouraged long-term grid improvements like solar power.

Recently, Eskom has had to bring back load-shedding after a 10-month respite.

This was done to balance the national grid after several generation units broke down, but Electricity Minister Kgosientsho Ramokgopa stressed that this was only a temporary setback for the utility.

Ramokgopa added that Eskom is working to bring 2,500 megawatts of capacity from its larger generation units online by March.

Once completed, he said, the company could confidently declare that “load-shedding is behind us.”

However, while improvements in Eskom’s operational efficiency and electricity supply may have led to a stop in load-shedding for the last 10 months, it does not mean that South Africa has had an uninterrupted electricity supply.

Notably, there have still been consistent periods of load reduction in South Africa, and some residents have accused Eskom of using this to unfairly target specific communities.

“We should be very careful that low reduction must not be a cover for load shedding because load reduction is a very different form of reducing power,” Madhi said.

“Load reduction in its intended form is not supposed to impact a specific demographic or a specific area other than for technical reasons. It is purely a technical solution to overcome overload on certain substations on the distribution end of a network.”

However, Madhi explained that there’s good reason to believe that, given the location and timing of the load reductions that have been happening, they have been providing some cover for load shedding.

Whether this is really the case will become clear when enough data becomes available, but it is certainly a possibility.

Targeting specific areas that do not pay their Eskom debt to receive load reduction, as residents are accusing, would not benefit South Africa in the long term, Madhi explained.

This is because poor power delivery would lead to an uptick in illegal activity and connections, which would increasingly overload those substations.

As a result, the cycle will just keep reinforcing itself, and Eskom will keep thinking that these areas are not very economically attractive, he said.

According to Madhi, the solution to this “vicious cycle” is to fix the grid in those areas and to prioritise parts of the distribution network that are overloaded, regardless of the immediate economic return.

The issue, however, is that Eskom may choose to prioritise areas that will give them a greater immediate return on investment.

“But they have to take that leap and fix those areas where where load reduction is likely to occur and spend that money.”

“You will only start seeing the benefit of that over the long term, and this is the problem. Eskom doesn’t have the luxury of looking at the long-term picture.”

The other thing that needs to happen, Madhi explained, is to promote alternative energy options for these areas.

If Eskom doesn’t prioritise these areas, it is vital that they offer incentives that will speed up this alternative energy transition.

“Let’s at least incentivise those particular areas suffering from load reduction – and, in fact, the country as a whole – with specific tax rebates.”

South Africa has had these rebates in place for the last two years, and they have worked extremely well, he noted.

However, not only are these tax incentives being reduced, but Eskom also recently warned that all households and businesses with solar panels must register their installation or face significant fines, even if they don’t feed power into the grid.

This is part of Eskom’s broader effort to ensure compliance with national electricity regulations and maintain grid stability.

“Government is about to reduce those tax incentives, and I think that’s going to be one of the biggest mistakes,” Madhi said. “What they should be doing is increasing it so that areas like these could start to have power at a more affordable rate.”

A transition to alternative energy would help keep the lights on for South Africans while reducing the need for load-shedding and load reduction in the process, but it is also a more affordable electricity option.

Today, alternative energy options like solar power are a lot cheaper than grid electricity, Madhi noted.

While the price of solar electricity has gradually been coming down for years, the price of electricity has been increasing dramatically in South Africa, shooting up by as much as 800% from 2007 to 2022/2023.

The more that these alternative, “behind the meter”, solutions are rolled out, “the better for everyone, except perhaps for Eskom.”

“This is part of the problem because you have cheaper power; you have residents and businesses in control of that power with a predictable price path compared to Eskom, where it’s more expensive.”

In other words, Eskom doesn’t necessarily feel incentivised to roll out alternative energy solutions or offer tax rebates, since this will affect their own bottom line.

Eskom price increases compared to solar price increases

Historically, the Solar Energy Index reached an all-time high of $307.90 in May of 2008, but it has since stabilised. Since the beginning of 2025, the price decreased by 1.40%.

The graph below shows the Solar Energy Index over the last 10 years.

In comparison, the graph below shows how sharply electricity tariffs have risen in the past 16 years compared to other administered prices and headline inflation.

This article was first published by Daily Investor and is reproduced with permission.