Supply and demand dynamics mean the utility has far too much capacity at present …
Eskom says it has effectively switched off 13 675MW of generating capacity “due to excess capacity and lower demand during the holiday season”.
This capacity, primarily comprising coal power stations, is available to the grid but is not currently operating. To get this started and brought back online will typically take hours. The amount of capacity in cold reserve is equivalent to nearly three Medupi power stations, which has a nameplate capacity of 4 800MW.
While the stunning turnaround in the generation performance at Eskom over the last 18 months remains remarkable, that it is able to remove this amount of capacity from the system temporarily is both a demand and supply story.
On Friday (1 January), it said the evening peak demand would be 19 545MW – a nearly 4 500MW reduction from the same Friday a year ago (23 983MW).
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Drop in demand
Commercial users, particularly large ones, have installed solar and inverter systems to reduce their consumption from the grid. The maths makes sense, with some real estate investment trusts (Reits) reporting payback periods of four to six years.
This alternative generation has effectively nearly permanently removed this demand, with the grid only being relied on during very rainy or overcast periods.
This is one of the reasons Eskom wants to overhaul its tariffs to reflect the reality of it needing to be an always-available ‘back-up’ supplier (which is tricky to do with a base of large coal-fired power stations that take hours to ramp up and ramp down capacity).
Eskom estimates a total rooftop photovoltaic solar base of 7.4GW across commercial, industrial and residential users, compared to 7.6GW from all other renewable energy independent power producers who have contracted their supply to the utility. The former figure overtook the latter in August last year, but additional utility-scale renewables projects have since come on stream.
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The challenges in needing to ramp up, then down
The peak generation from solar, which is from midday into the afternoon, poses a real challenge to Eskom and the system operator – under the National Transmission Company of South Africa (NTCSA) – as it needs to remove supply from its coal fleet over that time.
On a largely sunny day across the country, the capacity from private solar is around 5GW at noon. This grows to nearly 8GW by mid-afternoon. This means Eskom has to ramp up generation by 8GW between midday and the evening peak in order to meet that demand. It says that, conservatively, a 50% increase in solar PV between now and 2030 will cause that gap to grow to 10GW.
This creates “significant flexibility requirements and planning uncertainty”.
On largely cloudy days, Eskom cannot remove that generation capacity at midday. Instead, it has to ramp up production by 5GW at midday to fulfil that demand that would be unserved by solar.
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Supply improvements
The supply-side turnaround is arguably more notable.
Eskom says its energy availability factor (EAF), a measure of capacity, was 69.14% in December 2025, a significant 12 percentage point improvement from December 2024. It says “year-to-date, EAF has increased to 64.35%, with the fleet achieving or exceeding the 70% benchmark on 49 occasions”.
The primary driver of this improvement has been the sharp reduction in unplanned breakdowns.
Between Boxing Day (26 December) and New Year’s Day (1 January), unplanned outages averaged at 6 822MW, nearly half the level a year prior (12 328MW). This saw its unplanned capacity loss factor (UCLF) decline to 14.06% (from 26.12% a year ago). On Friday, its unplanned outages were at 6 662MW, a level last seen in 2019.
Over the same timeframe, its planned capacity loss factor (PCLF) was at 9.41%, less than half of the 19.08% of a year ago.
Eskom says “the reduced level of planned maintenance follows Eskom’s intensive maintenance programme implemented last financial year – exceeding historical norms over the past three years – to restore fleet reliability”.
“The impact of this strategy is evident in the continued decline in unplanned outages.”
It says it used zero diesel at its open cycle gas turbines (OCGTs) for the second consecutive week.
At this point, diesel spending is R2.5 billion lower than at the same time last year. Between 1 April 2025 and 1 January 2026, Eskom spent R6.2 billion on diesel. It says that “notably, diesel consumption has been declining steadily month-on-month since May 2025, and the load factor for the full month of December was 0.26%”.
This article was republished from Moneyweb. Read the original here.