| Roundup of major energy and electricity news and developments in South Africa: 9 Dec 2024 to 5 Jan 2025 1. Eskom reports R55bn loss for FY 2023/24 but predicts profit turnaround in 2025. 2. Unit 2 at Koeberg nuclear power plant back online following extended shutdown. 3. Gas supply disruption: South Africa urges diplomacy amid Mozambique unrest. 4. Big wins for renewable energy as successful bidders announced in South Africa. 5. South Africa powers ahead with $27bn electric vehicle incentive plan. 6. Nine injured in explosion at Eskom’s Matla power station, one critical. 7. Eskom EAF, PCLF and UCLF data augers well for an end to loadshedding. To see an archive of all energy and electricity sector roundups to date, please visit www.eebi.co.za/news |
| 1. Eskom reports R55bn loss for FY 2023/24 but predicts profit turnaround in 2025. South African power utility Eskom announced a record R55bn after-tax loss for the 2024 financial year ending 31 March 2025, primarily driven by a one-off accounting adjustment linked to the spin-off of its transmission division, the National Transmission Company South Africa (NTCSA). Despite the grim headline figure, Eskom’s management expressed optimism about the utility’s future profitability, forecasting its first profit since 2017 for the upcoming financial year. The staggering loss contrasts with an improved operational performance that saw Eskom’s pre-tax loss shrink by R9bn to R25.5bn. The NTCSA separation, which aligns with South Africa’s energy reform plans, triggered an accounting write-off that severely impacted Eskom’s bottom line. Without this adjustment, the utility’s financial position would have appeared markedly stronger. Acting CEO Calib Cassim highlighted significant strides in stabilising Eskom’s operations, including an improved energy availability factor and a reduction in load shedding. Eskom also reported progress in cutting costs, though governance challenges and aging infrastructure remain formidable hurdles. The company’s debt burden, estimated at over R400bn, continues to strain its financial health despite a partial government bailout. While critics warn that Eskom’s path to profitability remains fraught with risks, including ongoing corruption investigations and systemic inefficiencies, the utility’s forecast of a R1bn profit for 2025 has been cautiously welcomed. Analysts say the turnaround hinges on significant electricity price increases, consistent operational improvements and robust oversight of its restructuring efforts. As Eskom balances its ambitious reform agenda with immediate operational demands, its ability to meet South Africa’s energy needs without compromising financial stability will remain under intense scrutiny. 2. Unit 2 at Koeberg nuclear power plant back online following extended shutdown. In a project initially planned to take six months, the 970 MW Unit 2 at Eskom’s Koeberg nuclear power station in the Western Cape province of South Africa came back online on 30 December 2024 following a 12-month shutdown to replace its three steam generators. This follows the return-to-service of Unit 1 after a similar extended shutdown of 11 months in 2023 for the replacement of its three steam generators. Now, after the one-year shutdown in 2023, Unit 1 must again go offline for over-pressure leak testing of the concrete structure that covers the nuclear reactor to ensure radiation is contained in the unlikely event of a nuclear accident. Then, when this is completed, Unit 2 must also be shut down again for over-pressure leak testing of its concrete containment structure. Koeberg’s upgrades are part of a broader effort to extend its operational life by 20 years. However, the persistent delays and extended outages underline the challenges of maintaining and modernising aging nuclear infrastructure. The staggered upgrades to Koeberg’s twin units are resulting in intermittent electricity generation over the four years between 2022 and 2025, including the period of severe load shedding in 2022 and 2023, raising concerns about reliability. Nevertheless, Eskom’s group executive for generation, Bheki Nxumalo, reaffirmed nuclear energy’s strategic role in South Africa’s power mix. “As South Africa phases out some of the aging coal-fired power plants by 2030, nuclear energy is poised to provide a reliable and stable baseload supply. Unlike intermittent renewable sources, nuclear power ensures continuous electricity generation,” he suggested. |
| 3. Gas supply disruption: South Africa urges diplomacy amid Mozambique unrest. Rising tensions following disputed elections and the proclamation of final electoral results by the Constitutional Council of Mozambique have triggered unrest resulting in about 250 deaths, and some disruption to South Africa’s gas supply. On 25 December 2024, Sasol announced a temporary reduction in the output of natural gas from its operations in Temane, citing safety concerns for its staff and infrastructure. The disruptions to gas supply, critical to industrial gas users in South Africa’s Gauteng and Mpumalanga provinces, highlights the growing vulnerability of regional economies to Mozambique’s ongoing conflict. Sasol subsequntly confirmed its decision, stating: “The safety of our people and assets remains paramount. While we’re committed to resuming operations, we are closely monitoring the evolving situation”. The disruption comes at a precarious time for South Africa, with industrial gas users facing a “gas supply cliff” in 2027/28. The government expressed concerns about the potential economic fallout, underscoring the need for swift action. “We urge all stakeholders in Mozambique to prioritise dialogue and de-escalation,” said a senior official from South Africa’s Department of International Relations and Cooperation (DIRCO). In the past, unrest linked to Islamist insurgencies has displaced hundreds of thousands and stoked fears of regional instability. South Africa’s appeal for diplomacy aligns with broader calls for international intervention to address the root causes of the conflict, including poverty, underdevelopment and poor governance. Meanwhile, Sasol’s precautionary measures serve as a stark reminder of the risks facing businesses operating in volatile regions. The energy disruption underscores the urgent need for coordinated regional efforts to restore stability and secure critical infrastructure. 4. Big wins for renewable energy as successful bidders announced in South Africa. On 23 December 2024, Minister Kgosientsho Ramokgopa announced the successful bidders for two key public procurement programmes of the Department of Energy and Electricity’s IPP Office. A total of 1760 MW of solar PV in eight winning projects, spread across the Free State, North West, Limpopo and Mpumalanga provinces of South Africa, were announced for Bid Window 7 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). A further eight winning energy storage projects totalling 615 MW / 2460 MWh were announced for Bid Window 2 of the Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP), located in Free State, Gauteng and North West provinces. Heading the charge in solar energy was Infinity Power, a leading renewable energy company headquartered in Egypt, and its local partner Pele Green Energy, with six projects totalling 1280 MW, followed by Scatec and Mulilo with single projects of 240 MW each. On the energy storage front, Mulilo led the way with five projects totalling 384 MW / 1536 MWh, with EMEA, Scatec and EDF each winning single projects of 77 MW / 308 MWh. Pricing for the winning solar PV projects proved to be aggressive, with the lowest bid at R0.42/kWh, the highest at R0.49/kWh, and with an average of R0.46/kWh. REIPPPP Bid Window 7 initially had an allocation of 3200 MW for onshore wind capacity. However, to date no associated wind projects have been awarded under this bid window primarily due to grid access constraints. However, the IPP Office is still evaluating further compliant wind and solar PV bidders for announcement as additional preferred bidders, subject to value-for-money negotiations. Some of the allocation for wind energy projects that were not successful under this bid window may be shifted to solar PV technology, as provided for in the request for proposals. |
| 5. South Africa powers ahead with $27bn electric vehicle incentive plan. South Africa has taken a major step into the future of green mobility by officially enacting a groundbreaking 150% tax incentive for electric and hydrogen vehicle production. The legislation, signed into law on 3 January 2025, is expected to stimulate the country’s nascent electric vehicle (EV) industry, potentially unlocking $27bn in investments. The ambitious tax incentive programme aims to position South Africa as a key regional player in the global shift toward sustainable transport. Targeting both local and international manufacturers, the initiative is designed to attract heavyweights in the EV and hydrogen fuel cell sectors, with Chinese companies already eyeing opportunities in the market. The government’s strategy is clear: drive job creation, boost exports, and reduce dependency on fossil fuels, while aligning with international climate goals. The new incentive offers manufacturers significant tax breaks on research, development and production costs. By doing so, South Africa hopes to accelerate the domestic production of EVs and hydrogen-powered vehicles, as well as the components needed for their assembly. With a strategic location, access to raw materials, and a skilled workforce, the country has ambitions to become a major hub for green mobility innovation. Analysts predict the incentive could lead to a surge in investments, particularly from China, which dominates the EV supply chain. “This initiative places South Africa on the map as a competitive destination for green technology production”, said a government spokesperson. As the global race to electrify intensifies, South Africa’s policy move signals its readiness to embrace a cleaner, more sustainable future while tapping into one of the world’s fastest-growing industries. 6. Nine injured in explosion at Eskom’s Matla power station, one critical. A transformer explosion at Eskom’s 3600 MW Matla coal-fired power station in Mpumalanga province has left nine people injured, with one individual in a critical condition. The incident occurred at the 600 MW Unit 6 of the power plant on 12 December 2024 during maintenance activities. An Eskom communication stated that the explosion stemmed from the rupture of a high-pressure steam steel pipe above the Unit 6 transformer. In addition to the loss of Unit 6, Unit 5 was also taken offline as a precautionary measure. The explosion, described as a sudden and powerful blast, prompted immediate emergency response efforts. The injured, comprising Eskom employees and contractors, were quickly transported to local hospitals. Eskom released a statement acknowledging the explosion and confirming that investigations are underway to establish the root cause. Matla power station, constructed between 1976 and 1983, is a critical component of Eskom’s power generation infrastructure. The power plant, designed for a 30-year life, is now over 40 years old. An assessment commissioned by South Africa’s National Treasury from an international consortium led by VGB Energy identified numerous issues at Matla power station impacting plant reliability, including a planned mid-life rehabilitation (2010 to 2013) that did not occur, poor coal quality, and deferred maintenance that further degraded key components. This incident highlights broader challenges within Eskom, where old infrastructure, inadequate maintenance and financial woes have contributed to frequent power outages. Industry experts warn that without substantial investment in modernisation and maintenance, such incidents may become more frequent. Labor unions have called for urgent safety reviews at all Eskom facilities, while local communities demand transparency in the ongoing investigation. |
| 7. Eskom EAF, PCLF and UCLF data augers well for an end to loadshedding. Eskom week-on-week energy availability factor (EAF), planned capacity loss factor (PCLF), and unplanned capacity loss factor (PCLF)trend graphs are now available for the full 2024 calendar year. Data monitored by EE Business Intelligence indicates that Eskom week-on-week unplanned generation unit outages (breakdowns) and partial load losses, as indicated by the UCLF data, were consistently lower for the full 2024 calendar year compared to that for 2023. This enabled increased levels of planned generation unit maintenance to be conducted over the full 2024 calendar year compared to that in 2023, which is indicated by the consistently higher PCLF data during 2024. Together, even with the increased levels of planned maintenance outages (PCLF), the significantly reduced levels of unplanned breakdowns and partial load losses (UCLF) resulted in an increased Eskom week-on-week energy availability factor (EAF) trend from 1 April 2024 to the end of the 2024 calendar year compared to 2023. This improved performance by Eskom, together with reducing demand for Eskom electricity, and increasing supply from behind the meter self-generation, wheeling and utility-scale renewable energy (driven by the need for security of supply and rising Eskom and municipal electricity prices), coupled with a weak SA economy and the reducing energy intensity of the country, has spelled the end of loadshedding for the time being. |