The Rise of Independent Power Producers in South Africa

According to recent projections, Eskom’s role as the dominant supplier of electricity in South Africa may soon come to an end. As independent power producers, big companies, and rooftop solar installations continue to grow in popularity, it’s predicted that by 2025, Eskom will be producing less electricity than other sources.

An assessment conducted by Rand Merchant Bank/Morgan Stanley predicts that, by 2025, only 25.17GW of electricity produced in South Africa will come from Eskom. Meanwhile, ‘other supply’ sources, including imports, independent power producers, rooftop solar, and small amounts of imported electricity, will account for 26.82GW.

This shift in power supply dynamics is already prompting private investors to enter the market. For example, Anglo-American is set to produce 5GW of power in the next few years, and banks will finance up to R1 trillion in power production. As private investment continues to pour in, Eskom may soon become the minority supplier of electricity in South Africa.

However, it’s worth noting that load shedding will still be a reality in 2025. The projected power supply deficit for that year is around 400MW. This means that despite the shift toward private power, load shedding is not simply going to disappear overnight.

Furthermore, Eskom’s recent announcement that stage 6 load shedding will be back following a slight reprieve only serves to emphasize the importance of private investment in the energy industry.

As private investment continues to grow and Eskom’s role in the energy industry diminishes, the power struggle between private power and Eskom will undoubtedly become more pronounced. However, it’s important to remember that load shedding remains a significant challenge to be addressed, and private investment is only one part of the solution.

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