/ 10 October 2024

Electricity is a luxury in South Africa

Electricity Power Lines Running Through The Countryside Outside Of Cape Town.
In a country where electricity is essential for daily life, it is fast becoming a privilege rather than a right in South Africa. (David Harrison)

In a country where electricity is essential for daily life, it is fast becoming a privilege rather than a right in South Africa. Eskom has applied for significant tariff increases for the next three financial years, leading many to question how South Africans will cope with the rising cost of energy.

The National Energy Regulator of South Africa (Nersa) recently published Eskom’s Multi-Year Price Determination (MYPD) 6 revenue application, which outlines the utility’s financial needs for the periods covering 2026, 2027 and 2028. Eskom is seeking R446 billion for 2026, R495 billion for 2027 and a staggering R537 billion for 2028. These figures translate into huge price increases for consumers, including a 36.15% increase from April 2025 to March 2026, 11.81% from April 2026 to March 2027, and 9.10% from April 2027 to March 2028.

Such dramatic price hikes come at a time when many South Africans are already struggling with affordability and access to electricity. For a growing number of households, electricity is becoming a luxury — accessible only to those who can afford it. 

Eskom’s revenue application comes as it continues its efforts to recover from years of mismanagement, corruption and aging infrastructure. It has been embroiled in financial instability for over a decade, partly a result of unsustainable coal power generation, inefficiencies in operations and frequent maintenance issues. Eskom’s generation capacity has failed to meet the country’s electricity demands; there are still about nine million South Africans living without electricity 30 years after democracy.

Eskom has defended its price increases, saying they are necessary to achieve cost-reflective tariffs, a model in which consumers pay prices that fully cover the costs of generating and distributing electricity. This approach, Eskom argues, will contribute to the financial sustainability of the entity and improve its capacity to generate, transmit and distribute electricity without the constant need for government bailouts. 

But the effect on South Africans is severe. From 2007 to 2022, electricity prices have skyrocketed by about 800%, with many households and businesses struggling to keep up. This continual increase has exacerbated economic inequality, because low-income families are the hardest hit by the rising costs. 

Beyond rising costs, load-shedding and load-reduction, while currently minimally experienced, are perfect examples of electricity being a privilege in South Africa. Millions of South Africans are left in the dark for hours, sometimes even days, because Eskom’s generation capacity is repeatedly compromised by breakdowns at its coal-fired power stations, mismanagement and failure to invest in new infrastructure.

Load-shedding and load-reduction has not only disrupted daily life but has also had devastating effects on the economy. Businesses, particularly small and medium enterprises, are hit hardest, with power outages causing a loss of productivity and increased operational costs as companies turn to alternative power sources such as generators and solar installations. These alternatives are out of reach for most low- to middle-income households, further entrenching disparities between rich and poor.

The disparities in electricity access reflect South Africa’s broader economic inequalities. High-income households, with access to private capital, can shield themselves from rising prices by investing in renewable energy technologies. For low-income families, electricity bills take up a large portion of household income, leaving little room for essentials like food, education, and healthcare.

South Africa’s electricity woes are closely tied to Eskom’s mismanagement and lack of proper long-term planning. Decades of corruption, political interference and a failure to invest in sustainable energy sources have brought the utility to the brink of collapse. Eskom’s reliance on coal-fired power stations, which are expensive to maintain and environmentally damaging, has proven to be a costly gamble. Frequent breakdowns, coupled with the high cost of coal, have led to rising operational expenses.

The utility’s financial woes have also affected its ability to transition to cleaner, more sustainable forms of energy. Despite the country’s vast potential for renewable energy, Eskom has been slow to embrace green energy solutions. 

To move toward a fairer energy future, South Africa must prioritise investments in renewable energy sources that are affordable, sustainable and widely accessible. The government should also explore ways to democratise energy access, ensuring that electricity is no longer a privilege for the few but a basic right for all South Africans. Only then can the country begin to address the deep-rooted disparities in its electricity system and provide a brighter, more equitable future for its citizens.

Karabo Mokgonyana  is a renewable energy campaigner at Power Shift Africa focusing on renewable energy in Africa, just transitions and climate security.