South African households and businesses have reduced their reliance on Eskom’s electricity and enabled the utility to build up its reserves during the day to prevent load-shedding during the evening peak.
This is feedback from Professor Sampson Mamphweli, the head of energy at the South African National Energy Development Institute.
Mamphweli explained that reduced demand is a key reason South Africa has experienced over 50 days without load-shedding.
The performance of Eskom’s coal fleet has improved, with enhanced maintenance bearing fruit and the overall energy availability factor (EAF) rising above 65% last week.
While this is significant, reduced demand from businesses and households is the main reason why the country is not experiencing load-shedding at the moment.
This is partly due to South Africa experiencing a warmer winter than usual. However, the main reason is the rapid increase in rooftop solar and energy-saving techniques adopted by South Africans.
Eskom’s latest Weekly Systems Status Report shows that rooftop solar, according to the utility’s calculations, has increased by over 2,000 MW in a year to 5,490 MW at the end of April.
Mamphweli said this has greatly reduced Eskom’s electricity demand, giving the utility space to conduct intensive maintenance and, increasingly, build up reserves to manage the evening peak.
Data from the aforementioned Eskom report revealed that week-on-week contracted energy demand in South Africa is over 9% lower in 2024 than it was in 2023.
Increasingly, the increased generation from rooftop solar during the day and the subsequent reduced demand has enabled Eskom to build up reserves to be used during the evening peak.
“Households and businesses are offsetting the power needed from the grid, ensuring Eskom has the additional capacity to build up reserves for the evening peak,” he said.
Mamphweli said that as the country enters winter, the utility will struggle to meet demand during the evening peak, forcing it to tap its reserves more frequently to stave off load-shedding.
He also warned that load-shedding will make a return in June and July, with it potentially going as high as stage five.
Mamphweli’s analysis is similar to that of other energy analysts, such as Chris Yelland, the managing director of EE Business Intelligence.
“It is quite clear that demand for Eskom’s electricity is declining and has been for several years. This does not mean the country is using less electricity. It just means it is not coming from Eskom,” Yelland said.
This means that alternative sources of electricity, such as rooftop solar and commercial installations, supplement Eskom’s electricity generation.
This reduces the need for electricity generated by Eskom and reduces its burden, enabling it to conduct more maintenance.
Households and businesses are effectively replacing electricity generated by Eskom with power from their own alternative sources or private providers.
This trend is only set to accelerate as the cost of electricity from Eskom keeps rising, strengthening the business case for alternative sources of energy.
As a result, the utility finds itself in a debt spiral where it has to reinvent itself to compete with private players and relook at its business model.
First published by Daily Investor and reproduced with permission.