Andre de Ruyter’s warning about Eskom is coming true

Eskom said lower sales volumes put pressure on prices due to the business’s high fixed costs for operating and maintaining the system.

Simply put, as Eskom sells less electricity, people who pay for it can expect higher prices, as seen over the last 15 years.

Former Eskom CEO Andre de Ruyter has previously warned that the utility’s cost path, where it consistently increases prices above inflation, is unsustainable.

Many households and businesses have moved to solar and battery backup systems, which has lowered the amount of electricity sold.

Eskom then significantly increased its electricity prices to compensate for the lower sales, which, in turn, drove more people to solar to save costs.

The households and businesses which install solar PV and battery backup are typically Eskom’s best customers.

“If you extrapolate from current trends, Eskom will eventually be left with a customer base of people who cannot afford electricity and therefore don’t pay for it,” he said.

The situation is playing out in real time and was explained clearly in response to a question from a Member of the National Assembly, Alan Beesley.

Beesley asked the Minister of Electricity and Energy, Kgosientsho Ramokgopa, about the impact of lower sales on Eskom.

He asked for details of the findings of the assessment his department conducted on the impact of declining electricity sales on Eskom’s financial sustainability.

He also asked whether declining electricity consumption will put upward pressure on electricity tariffs to recover fixed system costs.

Beesley also asked what measures have been considered to protect consumers from further price increases.

Electricity Minister Kgosientsho Ramokgopa confirms the challenge

Ramokgopa confirmed that the declining trend in sales observed over recent years has had a direct impact on revenue generation.

“Lower sales volumes do place upward pressure on tariffs due to the high fixed-cost structure of the business,” he said.

He explained that the costs of operating and maintaining Eskom’s system must be recovered over a smaller sales base.

“Sales retention and growth are therefore a key strategic priority within Eskom’s corporate planning framework,” Ramokgopa said.

He said Eskom is implementing a range of targeted sales-retention and growth initiatives to increase volumes.

These initiatives include customer-focused interventions, tariff restructuring, and broader demand-stimulation measures.

“These initiatives are expected to stabilise current trends, support the gradual recovery in sales volumes over the corporate planning period,” he said.

The Minister added that the initiatives, which include operational efficiencies, will help protect customers from further price pressures.

“Eskom is driving operational efficiencies and positioning the business for future tariff increases within the single-digit range,” he said.

This will prevent what happened over the last sixteen years, during which electricity prices increased by 987%.

Ramokgopa is confident that sales will gradually recover over the corporate planning period, thereby enhancing revenue and financial sustainability.

Eskom sales volume decline

Over the last decade, Eskom has experienced a compound annual reduction in sales volumes.

This trend was driven by sluggish economic growth, customers improving their energy efficiency, and many large power users generating their own electricity.

Sales in 2023 and 2024 were severely impacted by load shedding and load curtailment, which became a daily event.

The unserved energy due to generation supply constraints meant Eskom was unable to meet existing demand.

Over the last financial year, there was virtually no load shedding. That, in turn, helped to bolster electricity sales by 3.5%.

This increase is attributed to improved generation plant performance, which led to a much lower frequency and severity of load shedding.

Additionally, international sales saw a significant increase as Eskom provided emergency support to neighbouring countries affected by regional drought.

It provides electricity to Botswana, the Democratic Republic of Congo, Eswatini, Lesotho, Mozambique, Namibia, Zambia, and Zimbabwe.

Over the last financial year, which ended on 31 March 2026, Eskom generated R18.8 billion from electricity sales to these countries.

Financial Year	Total Sales (GWh)	Year-on-Year Growth
2016	214 487	-0.80%
2017	214 121	-0.20%
2018	212 190	-0.90%
2019	208 319	-1.80%
2020	205 635	-1.30%
2021	191 852	-6.70%
2022	198 281	+3.40%
2023	188 401	-5.00%
2024	183 311	-2.70%
2025	189 723	+3.50%