Eskom’s chickens are coming home to roost

Organisation Undoing Tax Abuse (OUTA) CEO Wayne Duvenage says Eskom’s chickens are coming home to roost as South Africans reduce their reliance on the power utility.

This follows the release of Eskom’s annual results for the year ended 31 March 2026 on Monday, 31 August 2026.

The results revealed a significant decline in electricity sales, despite the power utility’s revenue reaching new heights.

Speaking to 702, Duvenage said the increased revenue, driven by lower electricity sales, was absurd and represented “an abuse of a dominant or monopolistic position”.

“Eskom, in 2007, had very little in the way of competition from rooftop solar and the rest. That’s changed dramatically,” he said.

“If we go back to 2007, Eskom sold just under 220 terawatt-hours, and that is down substantially by almost 20% today, and yet their revenues have gone up 800% over the last 20-odd years.”

Duvenage said this was a significant problem and that Eskom couldn’t continue to rely on price increases as sales fell, noting that sales had declined 6% year-on-year as of 31 March 2026.

He added that Eskom’s industrial sales were equally concerning and also down around 20%. Duvenage said South Africa was no longer a productive country in terms of electricity.

Duvenage warned that Eskom’s electricity sales declines were expected to worsen as more South Africans adopt solar.

“Today, you would not build a new building, a new house, without installing a solar system and a small-scale embedded generation (SSEG) system,” he stated.

“That’s the reality, and businesses, agriculture, industry, it’s all doing as much as it can to not rely on the state.”

Duvenage highlighted that although Eskom’s electricity sales had declined since 2007, its revenue from sales had increased from R39 billion to R354 billion.

“That is absolutely absurd and an abuse of a dominant or monopolistic position. The chickens are coming home to roost. People find the solutions and remove themselves from government,” he said.

“This big utility, on which the poor, who cannot afford to go off-grid, are going to rely, is going to become a socialised debt.”

A noose around South Africa’s neck

Wayne Duvenage, CEO at the Organisation Undoing Tax Abuse

Duvenage explained that taxpayers would be the ones forced to subsidise costs because “Eskom is too big to fail”.

“We cannot let it fail, and so it’s going to become a serious noose around the country’s neck in time to come, and we have to find solutions for this,” he said.

“Sadly, the damage has been largely done over the past one-and-a-half decades. Again, we have to just put this down to poor leadership, poor management, political interference, and ANC ideology.”

Eskom’s results for the year ended 31 March 2026 showed that it sold just 178 terawatt-hours (TWh) of electricity.

This was 6.2% less than it sold in the previous financial year and the lowest amount of electricity it has sold since 2000.

However, despite the substantial declines, Eskom reported that its after-tax profit grew from R14 billion to R30.3 billion year-on-year.

This was primarily the result of Eskom’s frequent above-inflation electricity tariff increases, which it implemented each year.

Eskom’s biggest sales decline was seen in its sales to industrial customers. These customers bought 9.7TWh less from the utility than it did in 2025, representing a 22.5% year-on-year decline.

It attributed these declines to a struggling ferrochrome industry. Eskom said ferrochrome smelters in South Africa were experiencing “hardship”.

Ferrochrome is used to make stainless steel, and it can also be added to engineering and carbon steels to harden them and increase heat resistance.

Several ferrochrome smelters shut down or halted operations as Eskom’s electricity tariffs increased their input costs to a point where their products were no longer internationally competitive.

Eskom and 2 major ferrochrome smelters, Glencor Merafe and Samancor, entered into a new negotiated price agreement (NPA) in 2026.

These firms pay R0.62 per kWh, which is substantially less than the R3.56 per kWh that residential customers on Eskom’s Homepower 4 plan pay.

However, Eskom’s electricity sales problem goes far beyond industrial customers. Exported electricity sales also dropped by 8.3%, or roughly 1.2 TWh.