KEY POINTS
- Eskom says South Africa’s electricity market reforms are irreversible as private power producers gain ground.
- The utility plans to expand into data centres, electric vehicles, renewable energy and electricity exports.
- CEO Dan Marokane says Eskom still supplies 85% to 90% of South Africa’s electricity despite growing competition.
South Africa’s state-owned electricity utility, Eskom, is preparing for a major transformation as the country moves towards a more competitive electricity market, ending more than a century of dominance in power generation.
The utility is reconsidering its traditional business model as private companies increase their participation in electricity generation, distribution and trading. The shift represents a significant change in Eskom’s position on the government’s electricity reforms under President Cyril Ramaphosa.
Eskom executives are meeting to determine the company’s long-term direction as the government pushes ahead with plans to restructure the electricity industry and separate key parts of the utility’s operations.
Chief Executive Officer Dan Marokane said the company had abandoned the idea that it needed to own and manage every part of the electricity value chain.
Speaking to Bloomberg Television, Marokane said the reforms were irreversible and that Eskom needed to adapt to the changing market rather than rely on its historic dominance.
The proposed restructuring would separate electricity generation, transmission and distribution into distinct operations, opening more opportunities for private-sector participation.
Eskom had previously raised concerns about the proposed unbundling, but its leadership is now focusing on how to remain competitive as the industry changes.
Private power producers challenge Eskom’s dominance
Eskom has historically dominated South Africa’s electricity generation industry since its establishment 103 years ago. However, the entry of independent power producers is gradually reducing its share of the market.
Marokane said Eskom still supplies between 85% and 90% of the country’s electricity, although he acknowledged that private generators were beginning to erode its market share.
He noted that maintaining the same level of dominance would become increasingly difficult as more competitors entered the sector, particularly in an economy that was not growing strongly enough to support rising electricity demand.
Rather than attempt to preserve its former monopoly, Eskom intends to use its existing infrastructure, generation capacity and regional connections to develop services that private competitors may struggle to provide on the same scale.
The company’s strategy will focus on identifying new customers, expanding its energy offerings and strengthening its financial position as electricity market reforms progress.
One of Eskom’s priorities is to increase electricity sales to data centres, which require reliable and substantial power supplies to support cloud computing, digital services and artificial intelligence infrastructure.
Marokane said Eskom was already working with developers interested in establishing data centres in South Africa.
The utility also plans to install electric-vehicle charging stations across the country as demand for electric mobility develops.
These initiatives could help Eskom secure new sources of electricity demand at a time when competition and the growing adoption of household and commercial solar power are changing how consumers obtain electricity.
