Wietze Post: What Eskom, IPPs and big business must do now (Before 2029).

Key topics:Eskom demand collapse driven by cheap solar and battery S-curve disruptionGrid stress: surplus capacity, rising tariffs, batteries, cold reserve shiftConsumers & IPPs move to off-grid, wheeling, mini-grids; 2030 risk contracts.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 every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Ir. Wietze Post.Previously in this series, I discussed: The numbers don’t lie – Eskom’s demand is collapsing – the data. South Africans are steadily moving away from Eskom.The S-Curve is here – and Eskom is on the wrong side of it. New technologies usually follow an S-curve. Their adoption starts slowly, then quickly picks up speed. In South Africa, solar and battery technologies have entered the phase of rapid adoption. Meanwhile, the demand for Eskom’s electricity is following a downward S-curve.Solar and battery prices are collapsing – Wright’s Law is at work. The primary driver of Eskom’s accelerating decline is cost. Eskom is raising its energy prices, while the cost of solar power equipment is going down.Duck curves, day-night inversion, and the coming zero-demand hours. Eskom’s daily demand curve has permanently transformed. This change shows that consumers need less energy from Eskom. And they need less every year. Duck curves and day-night demand inversion now appear frequently in Eskom’s supply patterns. This is no longer a gradual energy transition; it is now a rapid disruption. Advice for EskomShift tariffs: make daytime the cheapest (off-peak).Ensure all customers are on Time-of-Use tariffs. This includes users on municipal grids.Avoid discouraging customers by increasing connection fees. Instead, incorporate these fees into energy prices or eliminate them. Fixed connection fees encourage disconnection. Keeping customers connected is key to grid stability. Too many disconnections will harm the grid as then there won’t be enough subscriber revenue to maintain the grid.Recognise that summer demand is decreasing to near-zero. Yet winter remains challenging for customers. Adjust your pricing strategy. Plan to avoid worsening the cycle of rising prices and falling sales.From the 2027 financial year, Eskom’s revenue is likely to decrease faster than it’s raising its prices.The winter rainfall region is home to Eskom’s most enduring customers. Customers in the summer rainfall region are likely to disconnect soon.Install grid-scale batteries at all nodes to react instantly to local demand and to stabilise the grid.As demand is likely to fall rapidly, Eskom will increasingly put power stations in cold reserve. “Eskom has excess capacity that can light up all our neighbouring countries” – Mteto Nyati, Eskom Chairperson, on X. Selling Eskom’s energy to neighbouring countries is a good idea. I recommend setting up an urgent marketing campaign in our neighbours’ countries.Instead of a shortage of power generation capacity, Eskom is likely to experience a large surplus capacity. Eskom is already putting power stations into cold reserve. Eskom is unable to decrease its consumption point prices. Thus they can’t compete with private generation plants. Rooftop solar is usually the lowest cost for most consumers. There’s no point in building additional Eskom generation plants, be they solar, coal or nuclear. Advice for IPPs and solar farm developersNoon-time power generation will face more curtailment. That’s because distributed solar meets consumers' noon demand. A better strategy is to sell directly to nearby customers using wheeling or mini-grids. Adding on-site batteries may be beneficial in the medium term. Competing on the grid with low-cost rooftop solar may not be financially viable within 4 to 5 years.Counting on the grid is risky because its future setup is unclear. Fewer users will mean less maintenance funding. This will raise fees for those who stay, which could cause more users to leave. Large industries may install direct power lines from the generation source to the load. Smaller users might generate power on their own roofs or contract rooftop space from nearby rooftops. Advice for large consumers and businessesInstall solar panels on all available rooftops. Ensure you have enough solar power capacity for winter and enough battery storage for use at night. You may want to go entirely off-grid. Then, add extra batteries or small generators to keep things running during long overcast periods. Use generators to charge batteries, not to directly power operations.Use wheeling between your sites. Collaborate with neighbours to set up mini-grids or virtual power plants.Commercial and industrial estates should set up minigrids.Developing new manufacturing sites near existing solar or wind farms is a viable strategy. The Northern Cape has an energy generation advantage. The Boegoebaai Port Project deserves attention. It has the potential to deliver significant advantages to energy-intensive industries.This series of articles has analysed Eskom demand trends and pointed to a likely scenario for the next decade. Based on the scenario presented, any long-term contract relying on Eskom or NTCSA transmission after 2030 may carry substantial risks.Banks should be mindful of loans to the coal sector. For instance, coal delivery trucks may soon find themselves out of work. Debtors may be surprised by a rapid decline in the industry. Transmission Grid ConcernsSouth Africa is moving away from its century-old coal-based grid. Instead, tens-of-thousands of solar and battery systems are taking its place..Read more:.Wietze Post: Duck curves, day-night inversion and the coming zero-demand hours.As a result, the grid is under significant pressure. Transmission and distribution now make up the majority of a consumer's electricity costs. These costs will soon be carried by a much smaller volume of electricity.The Electricity Regulation Amendment Act (ERA Act) came into effect on 1 January 2025. It aims to make the market more competitive and speed up the clean-energy transition (Government Gazette proclamation, Dec 2024). It may help preserve parts of the grid, but it will not reverse the underlying economics. Bottom lineEskom’s decline increasingly mirrors South African’s financial and environmental gains. On-site generation provides cheaper, cleaner, and more reliable power. It benefits those who act fast.Over the next four to seven years, a clear divide will emerge between those who are prepared and those who are not.The solar tsunami is no longer approaching.It has already arrived.

Wietze Post: What Eskom, IPPs and big business must do now (Before 2029).

Key topics:

Related Stories