Load shedding has eased compared to the worst years. Power cuts are less frequent. Energy availability has improved. Yet electricity bills keep climbing.
For many households and businesses, this feels contradictory. If supply is getting better, prices should fall. That logic works in consumer markets. It does not work in electricity.
Electricity pricing follows costs already baked into the system, not today’s performance.
What Makes Up the Cost of Electricity in South Africa
To understand rising tariffs, you have to look at what consumers are actually paying for.
Generation
This is the cost of producing electricity at power stations. It includes coal procurement, staff, fuel handling, water, and plant operations.
Maintenance
Old stations require constant repairs. Parts wear out. Boilers crack. Turbines fail. Maintenance now consumes a larger share of Eskom’s budget than it did a decade ago.
Transmission
Electricity must travel across thousands of kilometres of high-voltage lines and substations. Expansion, upgrades, and grid stability all add costs.
Debt servicing
Eskom’s debt sits above R400 billion. Interest payments alone absorb tens of billions of rand every year. That money does not build new capacity. It simply services past borrowing.
All four components feed directly into tariffs approved by the regulator.
Why Better Supply Does Not Mean Cheaper Electricity
The cost of keeping old power stations running
South Africa’s coal fleet averages more than 30 years in age. Older machines cost more to operate. They fail more often and require deeper, more frequent repairs.
Improving reliability has required more planned maintenance, more specialist contractors, and more spare parts.
That stabilises supply. It also raises operating costs.
Reliability and cheap power rarely coexist in an ageing system.
Diesel and emergency generation costs
During tight periods, Eskom runs open-cycle gas turbines on diesel. These plants are designed for emergencies, not daily use.
Diesel generation can cost several times more than coal or renewables.
When the system is under pressure, Eskom burns fuel to prevent blackouts. The bill eventually shows up in tariffs. Short-term fixes create long-term price pressure.
Even if diesel use declines later, the financial damage remains.
Read Also: Is Eskom’s Power System Better Than Five Years Ago What the Data Shows
Eskom’s Debt and Tariff Pressure
Legacy debt burden
Much of Eskom’s borrowing came from past build programmes and cost overruns at Medupi and Kusile. Consumers are still paying for those projects.
Interest costs compound annually. Tariffs must cover these obligations whether electricity demand rises or falls.
Regulatory tariff approvals
Eskom applies to Nersa for increases based on its cost base. If costs rise, tariffs follow. The regulator may trim requests, but it cannot erase underlying expenses.
Prices reflect the balance sheet, not the mood of the grid.
Why Electricity Prices Are a Long-Term Issue
Infrastructure replacement cycles
Power infrastructure lasts decades. When it ages, replacement happens slowly and at massive scale. There is no quick reset.
Today’s investments will be recovered over 20 to 30 years through tariffs.
Grid expansion and modernisation
New renewable projects require stronger transmission lines and substations. Connecting fresh capacity demands billions in capital.
Cleaner power still needs wires, transformers, and financing. None of it is free.
Electricity systems reward patience. Costs stabilise only after years of disciplined investment.
FAQs
Why does electricity cost more even when load shedding improves
Because maintenance, fuel, and debt costs remain high even when reliability improves.
What role does Eskom’s debt play in tariffs
Interest payments are built into tariffs and add significant upward pressure.
Will renewable energy lower electricity prices
Generation costs can be lower, but grid upgrades and financing still add expenses.
Can electricity prices ever stabilise
Yes, but only after debt reduces, new capacity comes online, and maintenance normalises over time.
By Thuita Gatero, Managing Editor, Africa Digest News. He specializes in conversations around data centers, AI, cloud infrastructure, and energy.