South Africans have probably developed a serious case of Eskom fatigue by now, but this latest problem is unusual. For years, Eskom couldn't produce enough electricity. In the 2018 financial year it spent about R320 million on diesel for its emergency gas turbines, and as load shedding began to bite, that bill soared to almost R24 billion in the 2024 financial year. Now the problem has flipped. During the day, Eskom has too much electricity, and by June there were periods of spare capacity large enough for several of its coal-fired units to be placed into cold reserve. And dealing with that surplus is expected to cost Eskom R4 billion this financial year.
How South Africans made their own plans
So, how did we get here? After two decades of above-inflation tariff increases and years of unreliable supply, households and businesses did what South Africans do best when the system lets them down: they made their own plans, investing in their own renewable energy. The result, as the Minerals Council's senior economist André Lourens puts it, is that consumers are increasingly generating a portion of their own power. By June, the grid operator estimated that rooftop solar behind the meter had reached 9,107MW, up 35% in a year. That's just 500MW short of the combined power of Medupi and Kusile, Eskom's largest coal-fired power stations. And ironically, that's now creating a problem for Eskom.
Those panels do their work in the middle of the day, when more consumers use their own solar instead of the electricity Eskom supplies. But Eskom can't simply switch off its coal stations, because they need to be ready when the sun sets and people need Eskom power again to cook and heat water. As energy analyst Chris Yelland has pointed out, coal and nuclear units also can't ramp up and down quickly enough to follow the swings in wind and solar generation.
What curtailment is, and who pays for it
Supply and demand on the grid have to match, because failing to balance them could cause the entire grid to collapse. So the system operator, the National Transmission Company of South Africa (NTCSA), which is still part of Eskom, instructs solar and wind farms to reduce their output. That's called curtailment. The catch is that for projects in the government's renewable energy procurement programme, Eskom must still pay them as if it had accepted the electricity. It also loses the revenue it would have earned selling those units. Private projects are different: there, the curtailment risk is dealt with in the contract between the parties.
According to Keith Bowen, a senior manager at the NTCSA, that bill is expected to reach R4 billion this financial year. Next to the R383 billion that energy regulator Nersa allows Eskom to recover through tariffs, that isn't material yet. But electricity pricing expert Deon Conradie warns there's a significant risk it could spiral out of control, much like Eskom's diesel spending did, and that consumers will ultimately pay for it through higher electricity tariffs.
There are fixes. One of the more obvious is batteries: instead of wasting electricity during the day, Eskom could store it and use it when the sun goes down. But it will take at least another two years for that storage to come online. Another is cheaper electricity in the middle of the day, which Bowen says would give users an incentive to shift their usage into the hours when there's a surplus. Getting Nersa to approve changes to the tariff structure, though, could take "up to 10 years," he said. A panel on the issue also pointed to more gas-fired power stations, which can be ramped on and off at short notice.
And with more South Africans installing solar every year, this isn't necessarily a temporary problem. The number of instructions to curtail generation has increased dramatically since late last year, and the bill is expected to keep rising year after year as more consumers use their own electricity during the day. South Africa spent years paying to make more electricity. Unless Eskom finds better ways to manage all that daytime power, it could spend the next few paying for electricity nobody uses.
