Eskom's remarkable turnaround: A hopeful outlook for 2025
From hopelessness to closing the year 2024 in high spirits of hopefulness for the year 2025. The best part about being a writer and analyst is the privilege of observing, documenting, and interpreting historical events in their rawest forms. The art of column writing lies in capturing these moments and rendering them in ways that remain relatable across time.
Why, all of a sudden, has South Africa become globally infamous for championing a negative phenomenon that birthed the now commonly used phrase "load shedding," a term that elsewhere simply refers to frequent power cuts? In our uniquely South African way, we adopted a technical term to describe these power cuts. Eskom defines load shedding as a controlled process of temporarily switching off power to certain areas to reduce demand on the energy system. It is a last-resort measure to prevent the grid from collapsing entirely.
And so, the phenomenon of load shedding etched its name into global discourse, turning a technical challenge into a notorious hallmark.
South Africa in One Year
The theme of today’s column is South Africa's transformation in a single year. In just 12 months, the nation moved from the depths of its worst-ever energy crisis to closing 2024 with Eskom lauded as the best-performing utility on the African continent.
How did Eskom achieve this turnaround? As of December 8, 2024, Eskom has gone over 250 consecutive days without load shedding. This unprecedented milestone stems from the success of the Generation Recovery Plan, implemented on March 26, 2024. The plan has delivered remarkable results, including:
– Reduced unplanned outages: Unplanned outages have decreased by more than 8%.
– Improved Energy Availability Factor (EAF): The EAF has risen by over 7%.
– Significant diesel cost savings: Nearly R17 billion in diesel costs were saved year-on-year.
Eskom's resurgence is not just a technical feat; it carries significant economic implications. Experts predict a 2% GDP growth driven by stable electricity supply, alongside Eskom’s improved financial outlook.
According to Eskom:
“Eskom’s EAF averaged 59.4% over the past week and 62.8% year-to-date. Top-performing stations, including Majuba, Medupi, and peaking stations, achieved an EAF of 70% or higher. Four other power stations recorded EAFs above 60%.”
The utility also noted a consistent reduction in unplanned outages, recording 11 038 MW last week compared to 14 475 MW during the same period in 2023—a significant improvement of 3437 MW.
Eskom’s chairperson, Mteto Nyati, and CEO, Dan Marokane, have been pivotal in this recovery. Their leadership demonstrates that the utility was never a "dead horse," as infamously characterised by former CEO André de Ruyter. Eskom’s revival underscores what can be achieved with the right expertise, focused execution, and a commitment to long-term structural improvements.
Was the Public Misled?
For years, South Africans were fed the narrative that Eskom’s coal-fired power stations were beyond saving. Even those in the higher echelons and corridors of power were made to believe that any efforts dedicated towards revitalizing Eskom coal-fired power stations will be a waste of time.
Many believed privatisation was the only solution. Yet, the success of the Generation Recovery Plan proves otherwise. So who was lying to decision makers, the public and the masses? Everywhere you turned people would even admit that maybe it is time for Eskom to shut down its operations and hand over the power generation plants to the private sector to supply electricity.
Renowned intellectual Noam Chomsky, in his 10 Strategies of Manipulation, warns of the tactic of creating problems and offering prepackaged solutions. This “problem-reaction-solution” method fosters public acceptance of drastic measures, often to the detriment of common interests.
Chomsky’s insights resonate deeply with Eskom’s situation. The "problem" was framed as irreparable infrastructure. The proposed "solution" was privatisation, backed by relentless rhetoric against coal-fired plants. However, Eskom’s current achievements invalidate such claims. All the plants needed was diligent maintenance and an aggressive revitalisation strategy.
The Role of the Green Lobby
During Eskom’s struggles, proponents of renewable energy were salivating when Eskom power plant units were left stranded. The green lobby seized the opportunity to push their agenda, advocating for a shift away from coal as a panacea for the Eskom crisis. However, South Africa's industrial economy relies on baseload power from coal and nuclear sources. Abandoning Eskom’s coal-fired plants would have been akin to attacking the goose that lays the golden egg.
Historically, South Africa’s economy was built on a foundation of baseload power, driving mining and industrial development. The push to dismantle Eskom’s coal fleet ignored this reality, risking the nation’s energy security and economic stability.
A Year of Wake-Up Calls
The success of Eskom in 2024 offers crucial lessons for South Africa and other state-owned enterprises. Eskom’s turnaround is a good example that work carried out diligently that is done by a team of experts reaps results. It has proven beyond doubt that Eskom is still a great company. It just lacked a dedicated board team, a team of executives, a focused team of professionals and general workers to restore the nation's confidence in Eskom. The leadership of Nyati and Marokane has shown that with the right focus, even a company declared "dead" can be revived. If other follow this example, the future of South Africa will be great.
The past year has also been a wake-up call for the ruling party. Thank God the elections rolled around and a clear message was sent by the electorate to warn the ruling party against loadshedding.
The Path Forward
Looking ahead, South Africa must embrace reindustrialisation, underpinned by an expansion of baseload electricity capacity. This means investing in high-efficiency, low-emission (HELE) coal plants, nuclear energy, and even gas-to-power solutions derived from coal methane beds.
The global sentiment around energy has also shifted, with a renewed appreciation for reliable baseload power. Now the focus should turn towards full scale re-industrialisation.
For re-industrialisation to happen we need huge megawatts of baseload electricity. Reindustrialisation will revive manufacturing, create jobs, and bolster economic growth. For this to happen, South Africa must secure the megawatts required for sustained industrial activity.
Celebrating Progress
Despite a challenging year, South Africans can look forward to 2025 with renewed hope. Out of 364 days, we enjoyed 255 days without load shedding—a remarkable turnaround.
The festive season offers an opportunity for reflection and celebration. South Africans should take this opportunity to rest, spend time with loved ones, and acknowledge the year’s achievements. Eskom is in good hands and in a better place today. The past six years of severe energy crisis was a good wake up call for South Africa leaders. Eskom’s transformation is a testament to what is possible when leadership, strategy and dedication align.
Go tšwa ka magoro ase go lahlana — God willing, we will meet again in the coming year.
Crown Prince Adil Nchabeleng is president of Transform RSA and an independent energy expert.
* The views in this column are independent of “Business Report” and Independent Media.
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