Andre de Ruyter’s warning about Eskom playing out in real time

Eskom is increasingly running out of reliable, lucrative customers as households and businesses that can reduce their reliance on the utility are. 

This leaves Eskom with a base of poor and non-paying customers from which it has to generate sufficient revenue to cover its costs. 

To do this, the utility has turned to tariff hikes, which make its electricity increasingly unaffordable and boost the financial case for alternatives. 

As a result, the downward spiral continues, with Eskom’s own data showing a substantial drop in demand year-on-year in its Weekly System Status Reports. 

Former Eskom CEO Andre de Ruyter warned about Eskom entering such a spiral at the end of 2023, after he had left the utility.

While De Ruyter himself did not have a clear plan on how to halt the spiral, his warning is increasingly coming true as customers continue reducing reliance on Eskom. 

In just the past two weeks, Tiger Brands and the University of Cape Town (UCT) have signed wheeling agreements to access privately-generated renewable energy through Eskom’s grid. 

This will effectively cut their reliance on Eskom-generated electricity, with Tiger Brands’ manufacturing sites in Gauteng set to use private energy from 2028 onwards.

Within a decade, UCT plans for up to 90% of the electricity demand of its main and health sciences campuses to be supplied by private renewable generators. 

These two are just recent examples of how companies and institutions that can are turning away from Eskom as they search for reliable, cheap electricity. 

It is not only companies and institutions that are doing this, but household rooftop solar has also surged in recent years. 

In its latest Weekly System Status Report, Eskom estimates that there is 7,878 MW of rooftop solar in South Africa, with around 2,780 MW coming from households. 

The total has increased by 1,600 MW in the past year and by around 2,400 MW over the past two years. 

The impact of households, companies, and institutions reducing their reliance on Eskom is seen in the utility’s own demand data. 

In the same report, Eskom revealed that week-on-week residual peak demand and contracted peak demand are down around 8% in 2026 vs 2025. 

This shows that despite the absence of load-shedding, demand for Eskom’s electricity is declining significantly in South Africa. The two graphs below show this. 

Andre de Ruyter being proven right

In late 2023, De Ruyter warned that Eskom was on a path to being left with a largely poor and non-paying customer base. 

De Ruyter’s argument then was based on the impact of load-shedding, with the former CEO explaining that companies and households would invest in alternatives for a stable power supply. 

“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,” De Ruyter said in December 2023. 

This trend was expected to end when load-shedding came to an end, with there being no need to invest in a stable power supply as Eskom provided it. 

However, as electricity prices continued to rise and the components of solar power fell, the economic case for investing in alternatives improved. 

Thus, most companies and households are now investing in rooftop solar and other alternatives for financial reasons. Simply put, they want to cut costs and avoid being exposed to Eskom’s price hikes. 

This has been coupled with a surge of investment in energy-efficient appliances and alternatives, such as solar-powered geysers, gas stoves, gas heaters, and LED lights. 

All of this results in declining demand for Eskom-generated electricity from businesses and households who can afford to cut reliance on the utility. 

More recently, De Ruyter pointed to South Africa’s deindustrialisation as an example of demand destruction and a reduction in paying customers for Eskom. 

Speaking to Oxford’s Saïd Business School, De Ruyter explained that Eskom is accelerating South Africa’s deindustrialisation through its push for higher electricity prices, which are a direct result of its inefficiencies. 

“You have to think of electricity as your major input cost into the economy and the potential creator of a competitive advantage,” De Ruyter said. 

“You can’t just increase electricity tariffs to the point where, as is happening now, the economy starts to deindustrialise because the tariffs are too high.” 

As Eskom loses its biggest and most lucrative customers, its financial pressure is exacerbated, as it has to collect more and more revenue from a smaller, increasingly non-paying customer base. 

Energy analyst and managing director of EE Business Intelligence, Chris Yelland, said that Eskom should be very worried about 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,” Yelland said. 

“I would be very worried about demand, which is putting upward pressure on prices. This is one of many issues Eskom faces,” Yelland said.