Eskom Bitcoin mining plans

Eskom Group CEO Dan Marokane says South Africa’s state-owned power utility is looking into opportunities to support Bitcoin mining, artificial intelligence, and data centres for its future growth.

Speaking at the BizNews Conference earlier this year, Marokane said data centres and Bitcoin mining were fuelling the demand for electricity in the United States.

He said Eskom was heading towards a future where increased competition from renewables, such as self-generation and other independent power producers, will require them to turn down their plants.

While this is good news for load-shedding, it is a concern for Eskom’s long-term future. Marokane said they recorded a 4% decline last year, and expect that to continue for the next 3–5 years.

“The business has to reinvent itself and use part of this baseload that we have in a manner that can help it deal with the remainder of its debt pile that is sitting around our necks.”

In its latest financial results for the six months ended 30 September 2024, Eskom’s outstanding loans, debt securities, and borrowings stood at R403 billion.

Sector regulator Nersa recently revealed that municipal debt owed to Eskom was around R90 billion, describing the situation as “reaching uncontrollable levels”.

Electricity and energy minister Kgosientsho Ramokgopa warned in June 2024 that if left unaddressed, it could reach R3.1 trillion by 2050.

“We have to be looking at alternatives and there are exciting opportunities around AI and data centres, but also within the space of Bitcoin,” said Marokane.

Bitcoin mining is a process of solving a complex mathematical problem that validates new transactions and secures the blockchain’s distributed ledger against tampering.

Miners compete to be the first to solve a block. As a reward for contributing their computing power to the network, they are paid a “block reward” — a set amount of new bitcoin minted with every block.

They also receive any transaction fees people pay when sending funds over the network, although these are typically much less than the block reward.

A new block is created roughly every 10 minutes, and block rewards will end once 21 million bitcoins have been minted.

This system, called proof-of-work, is computationally intensive by design as a security measure. Because it is computationally intensive, Bitcoin’s proof-of-work algorithm is also energy-intensive.

Although less power-hungry approaches have been developed, such as Ethereum and Cardano’s proof-of-stake systems, Bitcoin proponents argue that nothing beats proof-of-work’s security and incentive mechanism.

Electricity prices and Bitcoin

Because Bitcoin mining is so energy-intensive, electricity is its biggest operational expense. The most profitable miners will be those who pay the least for electricity.

The U.S. Energy Information Administration (EIA) published a report in October 2024 stating that electricity consumption in the country was growing fastest in Texas.

“One of the main sources of growing demand for power is large-scale computing facilities such as data centres and cryptocurrency mining operations,” the EIA said.

“These facilities consume large amounts of electricity, both to run their computing equipment and to keep them cool. Some of the larger facilities can consume as much electricity as a medium-sized power plant.”

The EIA said large-load facilities, primarily cryptocurrency mining facilities, but also data centres and some industrial factories, have entered into voluntary curtailment agreements with the Texas grid system operator.

These function similarly to Eskom’s load curtailment programme, where these large users agree to temporarily reduce their power consumption during periods of high demand or low generator availability.

News in September 2023 that Bitcoin mining company Riot Platforms received $32 million (around R570 million) for curtailing its load outraged Texans, who were enduring a heatwave and had been asked not to use air conditioning.

Eskom grid under pressure

While Eskom is contemplating a future of reduced grid demand, it is currently in danger of needing to implement load-shedding.

Eskom reported that between 13 and 19 June 2025, the average level of unplanned outages reached 15,076 MW.

This is above the 15,000 MW level it warned would likely result in a minimum of 21 days of stage 2 load-shedding during the winter period.

Eskom published its winter 2025 outlook last month, stating that load-shedding would not be necessary if breakdowns remained under 13,000 MW.

Thus far, the state-owned power utility has avoided implementing rotational power cuts, but it has been forced to burn a lot of diesel to run its open-cycle gas turbines (OCGTs).

Its year-to-date OCGT load factor stands at 11.73%, much higher than the 5.78% recorded during the same period last year.

Eskom spent approximately R4.51 billion on fuel for the OCGT fleet, generating 768.64 GWh. This is higher than the 378.75 GWh generated during the same period last year.

It stated that diesel usage is expected to decline as more units return to service following the completion of long-term repairs and maintenance activities.

Eskom added that, despite the high use of OCGTs, diesel expenditure remains within budget for the current financial year.