Electricity price cuts for South Africa

Nyati spoke to broadcast and financial journalist Alishia Seckam in an episode of PSG’s Think Big Series 2025.

“What we have seen in other countries is that as you integrate more renewables, sometimes the cost can come down. That’s exactly where we want to be, to have the right mix,” he said.

“That can help us to make sure that we are providing affordable electricity. So, that is our next mission. We are done with energy security. The next drive is energy affordability.”

According to Eskom’s financial results presentation for the 2025 financial year, the government debt relief programme is primarily to thank for Eskom’s sustained operational and financial progress.

This relief programme includes R230 billion of taxpayer funds provided in the 2025, 2026, and 2029 financial years to help the power utility manage its overwhelming debt burden.

Eskom said the support has resulted in a positive spiral, enabling it to improve its performance and enhance energy security in the country.

“Enhanced energy security creates the conditions necessary for inclusive growth, job creation, and a more resilient energy sector which underpins national development,” said Eskom.

Eskom plans to introduce approximately 2GW of new renewable energy capacity to the market by 2026, with its longer-term goal being to achieve 5.9GW of clean energy capacity by 2030.

To achieve this, the Eskom generation unit’s budget includes around R18.5 billion designated for renewable and gas energy projects.

It also aims to establish a sustainable long-term tariff path, incorporating measures to address electricity affordability.

“In a break from the past, we are accelerating the review and restructuring of our cost base,” said Eskom CEO Dan Marokane.

“This is being done within the framework of the expected future single-digit tariff increases allowed by Nersa, as we drive efficiencies and take control of the factors within our control to address the affordability of electricity.”

Investigation into electricity prices in South Africa

One such aspect of Eskom’s pricing that contributes to the unaffordability of electricity, particularly for lower- and middle-income households, is the utility’s recently published Retail Tariff Plan (RTP).

Changes to the RTP surrounding fixed charges negatively impact these households, as well as people who have installed solar panels and reduced their reliance on Eskom-generated electricity.

The National Energy Regulator of South Africa (Nersa) has launched a market inquiry into the implementation and impact of fixed electricity charges.

It will investigate the impact of the generation capacity charge, legacy charges, and other fixed charges levied by Eskom and municipal power providers.

Nersa published a statement announcing the Terms of Reference (TOR) for the inquiry’s commencement on Friday, 26 September 2025.

“The inquiry will focus primarily on municipal fixed charges and Eskom’s unbundled generation tariffs, comprising the generation capacity charge, legacy charge, and variable energy charge,” the regulator said.

“It will involve requests for documents, data analysis, benchmarking, stakeholder submissions, and public hearings.”

It said the inquiry is in response to widespread concerns from customers and stakeholders about the impact of these charges.

Nersa stated that the charges have led to high increases being added to the Nersa-approved 12.74% tariff increase for Eskom.

It will also investigate the impact of fixed electricity charges on different customer segments and evaluate whether they align with approved tariff methodologies.

“This evidence-driven process is intended to enhance transparency, foster regulatory certainty, and ensure that tariff structures remain equitable and economically sustainable,” said Nersa.

Issued on MyBroadband by Myles Illidge | https://mybroadband.co.za/news/energy/612486-electricity-price-cuts-for-south-africa.html