Tide is turning at Eskom 

The tide appears to be turning at Eskom, with the utility’s energy availability factor (EAF) steadily set to rise towards its target of 70% by the 2027/28 financial year. 

Eskom’s EAF, which broadly measures the percentage of time its plants are available to generate electricity, recovered to 65.07% for the 2025/26 financial year. 

The EAF is the most important indicator of a utility’s reliability and operational efficiency, essentially measuring whether or not Eskom is doing its job. 

In the utility’s case, it tells a story of steady and then sharp decline, which has only been arrested in the past two years. 

Data from The Outlier shows that Eskom’s EAF fell significantly in the past 15 years, from 87.5% in 2006/07 to 54.56% in 2023/24.

This is closely aligned with the worst of South Africa’s load-shedding, with the country experiencing 329 days of power interruptions in the 2023/24 financial year. 

The collapse of Eskom’s EAF was the culmination of over a decade of mismanagement at the power utility, with focus being shifted away from investment in the maintenance of its power plants. 

Instead, as with many state entities, spending flowed towards consumption, largely in the form of salaries, leaving Eskom with unreliable power plants. 

This was coupled with Eskom having to run its plants extremely hard to limit the frequency and severity of load-shedding from 2007 onwards. 

Eskom had to do this as the government infamously refused its request to invest in new power generation in the late 1990s and early 2000s. 

The utility did not build a new power plant for 20 years after its buildout in the 1970s and 1980s was completed, despite demand increasing. This resulted in a supply shortfall, which led to the first incidence of load-shedding in 2007. 

Things changed drastically for the worse when Eskom had to build new power stations, Medupi and Kusile, which began construction in 2007.

The construction of these power stations was rushed and plagued by design flaws and rampant corruption. 

As a result, they cost over R467 billion to build, around R300 billion more than budgeted and over a decade behind schedule. Eskom produces less electricity after the construction than before. 

All of this contributed to Eskom’s EAF declining steadily at first and then sharply over the past 15 years. This can be seen in the graph below, courtesy of The Outlier. 

Turning the corner and entering a downward spiral

Now, the tide appears to be turning, with Eskom’s Generation Recovery Plan yielding strong results in plant reliability and output. 

In 2024/25, Eskom’s EAF recovered to 60.60%, underpinned by 310 consecutive days without load-shedding and a meaningful reduction in unplanned outages.

By 2025/26, the improvement accelerated, with Eskom reporting an EAF of 65.07% for 2025/26 and stating that the generation fleet achieved or exceeded the 70% EAF milestone on 83 occasions.

The utility has set targets of 70% EAF by 2027/28, a critical goal for long-term grid reliability. The last time Eskom had an annual average EAF of 70% or above was 2017/18.

However, there are concerns of a death spiral at Eskom, with experts pointing to the rise in private renewable generation as a major threat to the utility. 

Declining demand, driven by a stagnant economy and businesses increasingly using alternatives, means that Eskom has a smaller sales base from which to recoup the cost of production. 

This means that if it cannot find a way to produce electricity much more efficiently, it will have to raise prices, EE Business Intelligence managing director Chris Yelland explained.  

This has the potential to create a downward spiral for the utility, where higher prices feed into lower demand, which in turn forces prices to rise further. 

“Declining demand actually pushes the price up because you are trying to recover a certain cost base off a declining sales base,” Yelland said. 

“Whilst there has been a dramatic improvement in the reduction of load-shedding, one has to be concerned about the decline in demand.” 

“What is really going on with the decline in demand and the rise in alternative energy sources does not paint a healthy picture for a monopoly utility. In fact, it indicates just the opposite.”

This becomes a more pernicious problem for Eskom in an open electricity market, where it will have to compete with private players using cheaper technologies. 

These players would be able to fundamentally undercut Eskom’s prices and lure customers away from the utility, accelerating the downward spiral. 

In response, Eskom has launched Eskom Green to build out its own renewable energy generation facilities and reduce its cost of producing electricity.