Eskom Seeks New Power Buyers as Coal Closures Threaten Future Supply

South Africa’s current electricity surplus could give way to a power shortage after 2030 as Eskom prepares to retire several coal-fired stations, forcing the utility to reconsider when some ageing plants should leave the national grid.

Eskom said the present surplus has helped keep load-shedding away, but its system assessments show that available generation could fall below what the country needs after 2030. The warning comes as coal-fired stations including Camden, Hendrina, Grootvlei and Arnot face closure between 2027 and 2030.

The utility has already extended the operating lives of those stations and spent billions of rand keeping them running and connected to the grid. Their eventual closure could therefore become a major test for South Africa’s electricity supply.

“While the current surplus of power is welcomed as it means no load-shedding, system adequacy assessments indicate a deficiency for the period post-2030,” Eskom told the Sunday Times.

The warning puts the country’s present power surplus in a different light. Electricity demand has fallen significantly over the years as consumers have installed rooftop solar panels, leaving Eskom with more generation than the system needs at present.

Coal closures create a difficult supply gap

Eskom said the retirement of coal stations would need careful assessment because of its effect on electricity security and reliability.

“Consequently, shutting down power stations must be carefully evaluated to ensure the continued security and reliability of electricity supply,” Eskom said.

Energy expert Clyde Mallinson said Eskom appeared less willing to retire coal stations that have been scheduled for closure. He said the coal plants still make up the backbone of Eskom’s generation fleet.

“Eskom is reluctant to shut them [coal-powered stations scheduled to be decommissioned] down. It seems Eskom does not have termination plans currently," Mallinson said.

Mallinson said South Africa should invest heavily in wind and solar power so that new generation is available when the ageing coal stations eventually leave the system.

“For whatever reason, there’s no appetite and Eskom is stalling on decommissioning these plants … I am not fingering anyone in particular, but if someone has borrowed a lot of money to buy a coal mine, they would want to prolong the selling of coal,” Mallinson said.

He also said there were people “with a vested interest” in keeping Eskom buying coal for as long as possible.

Mallinson pointed out that much of the new renewable electricity capacity is being developed by independent power producers, not Eskom itself. This creates a situation in which the utility must manage an ageing coal fleet alongside a changing generation mix.

The immediate electricity picture, however, is much more comfortable than it was in previous years.

Surplus creates another problem for Eskom

Eskom said improved generation performance and lower electricity demand have helped keep the national grid supplied. Load-shedding was last implemented on May 15 last year, and the utility has since been able to meet demand consistently.

Only 26 hours of load-shedding were implemented between April 1 and August 15 last year, Eskom said.

The utility also reported that it had been able to meet demand during the highest-demand days in recent weeks without load-shedding. On August 12, peak total load reached 28,049MW, against available generation of about 30,131MW.

That left an operating margin of 2,082MW.

Eskom said the utility entered the 2025 winter period with improved plant performance, higher energy availability and less reliance on emergency generation resources. It was able to meet winter demand for more than 97% of the period.

“The utility has consequently been able to meet winter demand for more than 97% of the period,” Eskom said.

The utility has, however, stopped short of saying that load-shedding can never return. It warned that events such as several generating units failing at the same time or major external disruptions could still affect the power system.

“Initially, and the outlook remains positive, Eskom has consistently stated that no power system anywhere in the world can guarantee that load-shedding will never be required again.

“Unforseen events such as multiple simultaneous unit failures or significant external disruptions, can affect system operations,” Eskom said.

The current surplus is also creating financial pressure for Eskom because the utility needs more buyers for the electricity it produces.

Eskom said it was seeking new customers, with data centres among the areas where it expects electricity sales to increase. It is monitoring both local and global data centre developments, including the anticipated rise in electricity demand linked to advances in artificial intelligence.

“Eskom has a healthy pipeline of projects in the data centre sector, and this is integrated into Eskom’s long-term system planning to ensure that the national grid remains reliable, flexible and well positioned to support future economic growth,” Eskom said.

Eskom said it was also working with stakeholders on national energy planning to prepare for future electricity demand, including demand from data centres.

The major challenge for the utility is no longer simply having enough electricity today. It must manage the present surplus while ensuring that the retirement of ageing coal stations does not leave South Africa short of generation after 2030.