Is Eskom’s loss South Africa’s gain?: Wietze Post analyses Eskom’s energy market shift (Pt. 1)

Key topics:.Eskom's dispatched energy has steadily declined since 2008.Rising solar adoption is cutting into Eskom's market share.Eskom's price hikes make alternative energy more attractive..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..The seventh BizNews Conference, BNC#7, is to be held in Hermanus from March 11 to 13, 2025. The 2025 BizNews Conference is designed to provide an excellent opportunity for members of the BizNews community to interact directly with the keynote speakers, old (and new) friends from previous BNC events – and to interact with members of the BizNews team. Register for BNC#7 here..If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Ir. Wietze Post* .Introduction.South Africa's reliance on Eskom's power is waning. More people are turning to solar and wind energy, causing Eskom's Residual Demand to fall. Since 2008, Eskom's dispatched energy has decreased. This decline has sped up since 2021. In this article, I delve into Eskom's data and reflect on the shift in South Africa's energy market. The sequel will discuss the challenges for consumers and Eskom..Eskom's Financial Year ending March 31, 2021 (FY2021), included the 2020 Covid period. Our economy was shut down. Yet three years later, in FY2024, we consumed less Eskom energy (205.90 TWh vs 204.69 TWh)..Despite its challenges, Eskom has shown resilience. It has successfully reinvigorated many of its troubled power stations. Eskom is on a path to restoration. Completion work on the Kusile power station supports this positive outlook. Its maintenance work is reviving its power stations. Eskom idled some stations after completing their maintenance, thus building their reserves..Eskom's maximum hourly Residual Demand in 2024 was 32,043 megawatts (MW). Its total installed generation capacity is 53,089 MW (Power Station Capacity Table, July 2024). It can also draw on 6 gigawatts (GW) of capacity from Independent Power Producers (IPPs). Thus, Eskom has a nominal reserve of 65% over and above South Africa's peak demand. Eskom's focus on maintenance has improved its Energy Availability Factor (EAF). .Therefore SA has a surplus of power supply capacity; in theory, Eskom can provide all the megawatts you want. Nevertheless, consumers can get power elsewhere at a lower cost. Besides, alternative power options will improve your energy security. .Ignoring lower-priced competitors, Eskom is steadily raising prices. This is pricing Eskom out of a growing part of the energy market. Thus, lower-cost sources will take over more of Eskom's market. The low-cost sources continue to reduce prices while Eskom increases theirs..Assumptions and definitions.In this article, I assume South Africa is not consuming less energy than in 2021. We are likely consuming more energy now. At the same time, we have diversified our energy sources. We now get electricity from Eskom, solar and wind plants, generators, and other private sources. In addition, we have improved our energy efficiency..Before proceeding, I would like to clarify a few definitions. "Demand" is the total power demanded by the nation. The transmission system continuously supplies it to our homes and businesses. When you flip a light switch, that action signifies a demand for light. Many homes and businesses use rooftop solar panels to meet some of their demand. Eskom supplies "the rest.".Residual Demand, or the hourly average demand Eskom needs to provide, represents the "rest" of the power supply. The Eskom National Control Centre is in Simmerpan, Germiston. They manage demand by dispatching power from various sources. These include Eskom generation, international imports, dispatchable IPPs, wheeling, and IOS (Interruption of Supply). Eskom expresses the Residual Demand in MW (megawatts)..IPPs are Independent Power Producers. The NTCSA is the National Transmission Company of South Africa. The NTCSA is a subsidiary of Eskom and is responsible for managing and maintaining the grid. Wheeling is a process where some IPPs have contracts with large consumers. They generate energy specifically for them. These IPPs feed power into the grid, which is then "wheeled" or transported by the NTCSA to the consumer. The independent generators pay the NTCSA a wheeling fee for this transportation. IOS (Interruption of Supply) refers to demand-reduction resources managed by Eskom..When I mention hourly demand, I mean Residual Hourly Demand..Annual residual demand.Eskom's Residual Demand has slowly decreased since 2008. I have analysed the hourly Residual Demand data and annual aggregates from the beginning of 2021. Since then, Total Energy dispatched by Eskom dropped from 211.96 TWh in 2021 to 201.24 TWh in 2024 (calendar years)..During the intense episodes of 2023, load shedding cut deeply into Eskom's energy dispatch. Load shedding was less intense in the first quarter of 2024. Fortunately, Eskom suspended it on March 26, 2024. Since then, Eskom power was readily available until a fateful breakdown on January 31, 2025. Load shedding was reintroduced for a weekend, causing tremendous loss of trust in Eskom. .The load shedding episodes spurred many South Africans to install solar power systems. These plants then displaced even more energy that Eskom would otherwise have provided..So load shedding caused a shortage of electricity in 2023. Fortunately, it was readily available through most of 2024. Yet, surprisingly, monthly average and maximum hourly Residual Demands continued to fall throughout 2024..Yet there is a hint of lost demand recovery. I compared the difference in consumption between 2023 and 2024, and between 2022 and 2023. I looked at the gaps between years. In the second half of 2024, the monthly average demand decrease (vs 2023) was less than in 2023 (vs 2022). Moreover, higher monthly minimums in the second half of 2024 further strengthen the case for marginal demand recovery..I compiled several tables and charts using Eskom's Residual Demand data set. .The numbers above show the annual energy consumption. My focus is on the change from year to year. As annual energy consumption shrinks, the third column shows the inter-year gap increasing year by year. In other words, the gap becomes larger, year by year. The last column shows the percentage growth of the gap, from year to year..Table 2 shows Eskom's hourly demand numbers. The left half has the annual minimum, average, and maximum hourly demands for the year. The right half compares these to 2021's values..Maximum hourly residual demand.The maximum demand level is consequential. It determines how much capacity Eskom must keep ready..Figure 1: Daily Maximum Hourly Energy Demand. 14-day moving averages of maximum hourly demand, for each calendar year..Figure 1 shows the 14-day moving averages of maximum hourly demand for each calendar year. The chart runs from 1st December, through the subsequent year, and to 31st January of the next year. The deep, V-shaped dips, left and right, are due to reduced demand during the festive season..The lowest (green) line, representing 2024, shows a departure from the previous three years. This change is partly due to the many solar plants installed in 2023 and 2024. They had a noticeable effect throughout 2024. Solar plant installations will continue in 2025..The turquoise-blue line shows December 2024 and January 2025's daily maximum hourly demand. It's trending lower for 2025..Demand dips during the Easter holidays. Eskom's demand is seasonal; it typically increases from summer to winter and then declines to summer. Winter months exhibit sustained high demand levels. With the increase in solar installations, the data points for non-winter months will descend..Solar panels produce their highest energy in summer. It diminishes toward winter. Thus, Eskom's residual supply follows a counter pattern. Due to the solar plants, the differences in summer and winter demand will become more pronounced. Hence, the seasonal rise and fall will steepen..In Figure 2 below, the blue line shows the daily maximum demand over four years. The red curve shows the 365-day moving average. It shows a declining trend..Figure 2: Eskom Daily Maximum Demand 2021-2024.The highest demand in 2024 was nearly 6% lower than that of 2021. Typically, the annual peak demand occurs in June or July..In 2022, 2023, and 2024, each year's maximum demands fell from the previous year. However, some months of 2022 and 2023 saw increases compared to the prior year..In contrast, every month in 2024 saw a drop in maximum hourly residual demand compared to the same month in 2023. This is a robust reduction..The annual decline from 2023 to 2024 was 972 MW. Monthly maxima reductions ranged from 140 MW in June to 2,684 MW in May..Duck curves.As the solar power impact grows, South Africans will demand less power from Eskom. On sunny days, Eskom's supply curve will dip lower, particularly around noon. The downward curve of daily demand resembles a duck's belly, with the "head" and "beak" on the right and the "tail" on the left. So, we call these solar-induced charts "Duck Curves." Read more about duck curves by clicking this link..Figure 3: Example of a Duck Curve.The impact of rooftop solar plants in South Africa will become more prominent. The increase in private solar plants will lower each year's curve. For instance, on April 10, 2024, the demand for Eskom's power from 3 to 4 PM was 3,770 MW lower than on a similar day last year. Figure 4 typifies the pattern when solar power displaces Eskom'sdemand..Figure 4: Eskom Hourly Residual Demand. Annually, 2nd Wednesday of April. Duck Curve..Suppose the solar impact occurs only during the day. In that case, the demand curve will return to the prior year's level in the evening and overnight. However, if the demand curve settles lower at night, it may mean that batteries have stored solar energy to use during the night hours..Figure 5 shows weekly demand charts. They depict the demand close to the time of the solstices and equinoxes. The charts show a full week, starting from midnight, early Sunday morning, to midnight at the end of Saturday. They show Eskom's residual energy demand for every hour of the week. Each week is centred around the third Wednesday of the month. Each year has a separate line – from 2021 to 2024. The green line depicts the data for 2024, which is often the lowest line..Figure 5: 7-Day Demand Curves for Eskom's Hourly Residual Energy Demand. At Equinox and Solstice..Demand is usually lowest at night. There's one exception, shown in the December chart (bottom, left), where Sunday's daytime demand was lower. Such days will occurmore often in 2025..South Africa's duck curves are still in their early stages. Yet they resemble the initial trends seen elsewhere..Diurnal demand inversion.Diurnal Demand Inversion occurs when more power is used at night than during the day..Typically, we consume more electricity during the day and less at night. However, our solar plants displace Eskom's power. As a result, Eskom is asked for less energy during the day. This causes diurnal demand inversion. Thus more power is drawn from Eskom at night than during the day. When solar power capacity surpasses a threshold, we begin seeing frequent diurnal demand inversions..So I checked daytime and overnight demand minima. Before recent events, the last time we had a demand inversion was New Year's Day, 2021. Yet, from 12 October to the end of 2024 we had eight such events. In January 2025, we had 4 events..How much solar generation capacity is installed in South Africa?.Let me introduce you to two key energy organisations in South Africa. NERSA is the National Energy Regulator of South Africa. They regulate the electricity, piped gas,and petroleum pipeline industries..SAPVIA is the South African Photovoltaic Industry Association. It promotes the PV industry as part of the broader renewable energy sector. They maintain a record ofrenewable plants larger than 100 kW registered with NERSA..SAPVIA notes that South Africa has 10.646 GW of renewable plants. About 66% of that, 7.0 GW, is solar. However, these records do not include smaller and residentialsolar systems. Growth is around 130%, or higher, per annum. Therefore, if we install 1,000 MW in a given year, we expect to see at least 1,300 MW installed the followingyear..Eskom estimates that South Africa's total rooftop solar capacity reached 6.17 GW by the end of 2024. Yet, both Eskom and SAPVIA are likely underestimating. Unfortunately, SA's total solar generation capacity remains unknown..SAPVIA states South Africans installed 4220 MW of renewable capacity in 2024. Of that, 2894 MW was solar capacity. At a 130% growth rate, we will probably installmore than 3,700 MW of solar generation capacity in 2025..Click here for up-to-date data from SAPVIA. Then, use the buttons on the left side of the page to view various graphs..Next week, I will discuss my findings from the data. I will share my perceived trends and recommendations. I will discuss:.What is an Exponential Growth and Decline Rate – S-curves;The rate of decline of Eskom's power supply;My Thesis – a shift from Eskom's power;Solar, wind, and battery power is replacing grid energy;Cost of renewable plants;Eskom is experiencing steady decline;Advice for Eskom;A bleak future for transmission lines;Risks for IPPs;Considerations for large consumers..Read also:.Seems R240bn wasn't enough – Eskom could need another big bailoutEskom's tariffs set to surgeEskom's turnaround at risk from $5 billion municipal debt.*Ir. Wietze Post has broad research, engineering, and business experience. Wietze currently operates as a project leader. He has advised C&I and NPO renewable energy buyers for several years. The title of Ir is an abbreviation of 'Ingenieur', which is awarded to MSc graduates at technical/engineering universities in the Netherlands. Wietze's alma mater is Wageningen University. Wietze avidly follows energy developments around the world and in South Africa. In this series, he considers how global trends may play out in South Africa.

Is Eskom’s loss South Africa’s gain?: Wietze Post analyses Eskom’s energy market shift (Pt. 1)

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