Electricity Prices In South Africa: A Breaking Point Is Near

Our economy is in a no-man's land - yes, load shedding has abated, but any notable economic growth will be choked by a creaking, constrained grid. And ongoing electricity price fluctuations pose a constant threat to both our economic growth and the survival of businesses.

Energy price instability is not just an economic or political inconvenience, it is an existential threat to the country's growth prospects and the ability of business to do what it does best: create jobs.

The rising cost of electricity, with massive increases expected on 1 April 2025 and again in 2026 and 2027, coupled with a fragile and outdated grid, has set the stage for a systemic financial collapse that will continue to nibble away at plans for a growing economy. Late last year, Johannesburg residents and businesses were thrown into uncertainty when threats to summarily cut off City Power were made by Eskom.

In the past decade, electricity tariffs have increased by more than 300, with no correlation with Eskom's capacity to provide reliable, affordable power. Depending on who you ask, for years Eskom has been on the brink of collapse or a return to glory at any given moment. And with variable prices set to increase even further over three years up to 25 in some instances and sky-high increases expected for fixed charges, it's clear that breaking point is nearly here.

Its no secret that the cost of employment, especially in SMMEs, is also extremely sensitive to input fluctuations. Any sharp rise in electricity prices can be expected to lead to job cuts that no one can afford.