South Africa’s elite private power producers are whining for a government handout for revenue losses, following Eskom’s necessary decisions to restrict electricity supply to the grid due to national grid chokepoints, insiders say.
Eskom’s draconian measure to limit supply and curb over-reliance on private power has sparked a furious reaction from IPPs, who are crying foul, claiming the country’s electricity regulator has failed to compensate them adequately for revenue losses.
As South Africa struggles with power grid collapse, Eskom is still failing to keep up with demands from consumers and businesses alike. It has been forced to cut production and curb supply due to over-reliance on renewable energy.
A technical director at Sola Group, Ian Burger, who produces around 100MW, was instructed by Eskom to reduce production by up to 80%, forcing the firm to supply power at a lower capacity.
Sola Group is currently tied up in a contract with mining firm Tronox, which it claims will leave them with significant revenue losses. As South Africa’s power grid collapses under the strain, Eskom claims that costs for curtailing renewable energy are lower than the hundreds of billions needed for grid upgrade.
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In an apparent move to placate its investors and appease South Africa’s dwindling reserves of trust in its ability to provide basic services, Eskom is expected to make drastic curtailments from 2026 onwards.
Kilian Hagemann, CEO of G7 Renewable Energies, called Eskom’s proposals to ration energy production a necessary evil, citing costs of grid congestion, stating “the devil still is in the detail, but this raises the possibility of further minimising the cost borne by consumers by curtailing those IPPs with the lowest tariffs first.”
