Power Crisis Left South Africans Facing Health Risks, Lost Jobs, Darkened Homes

South Africans have lived the consequences of electricity failure in the most direct terms. Families sat through hours of darkness. Hospitals and schools struggled to maintain basic functions. Small businesses bled income while larger ones lost competitiveness, many forced to buy generators and diesel just to stay operational. The electricity crisis that gripped the country not long ago was not an abstraction; it was a daily assault on ordinary life.

The cost of power compounds that burden. Over two decades, electricity prices have risen sharply, squeezing households already stretched by food, transport and other essentials. For businesses, high electricity costs reduce competitiveness and discourage the investment needed to create jobs. This dual crisis of unreliability and expense has eaten away at the foundation on which economic growth depends.

Progress has been made. Through the Energy Action Plan and improvements to Eskom’s performance, load shedding has been substantially reduced, and Eskom’s latest results show signs of stabilisation. That achievement deserves recognition. Yet the work is far from complete. South Africa’s electricity system has relied overwhelmingly on a single company to meet the energy needs of an entire economy. When Eskom’s performance deteriorated, the country had few alternatives. That structural vulnerability cannot be allowed to persist.

The solution lies in transforming the electricity sector’s architecture. A new Electricity Pricing Policy has been published to ensure transparent tariffs, prevent inefficiencies from being passed to consumers, expand access for the poor and enable competition in electricity generation. The energy regulator NERSA is finalising regulations to establish a competitive wholesale electricity market where multiple generators, both public and private, can compete to supply power. That competition can drive efficiency, encourage investment and place downward pressure on electricity costs.

South Africa possesses some of the world’s best solar and wind resources. With proper infrastructure, regulation and investment, the country has the potential to become one of the world’s most competitive producers of clean electricity. Over time, cheaper, greener and more reliable power could lift the economy’s competitiveness, support industrial expansion, enable new industries such as green hydrogen and electric vehicle production, and create hundreds of thousands of jobs.

For competition to function fairly, every electricity producer must access the national grid on equal terms. That is why establishing an independent, state-owned Transmission System Operator represents one of the most important elements of electricity reform. The TSO will manage the national grid and electricity market independently and impartially, ensuring that Eskom and other producers compete on level ground. It will also mobilise the investment needed to expand the transmission network so new generation projects can connect to the grid.

The Eskom Restructuring Task Team, appointed at the beginning of the year, is implementing this reform. The team includes the Presidency, National Treasury, Department of Electricity and Energy, Eskom and the National Transmission Company South Africa. Several principles guide the process. Eskom will remain state-owned and must enter the renewable energy market to compete effectively. The Transmission System Operator will also be state-owned, as the national transmission grid is a strategic national asset held in the public interest. The TSO must operate independently and impartially without favouring any producer. The reform must strengthen rather than weaken Eskom; transmission asset transfer will protect Eskom’s financial position and respect lenders’ legitimate interests. Workers will not bear the cost of reform. Government has committed to ensuring no jobs are lost as a direct result and that organised labour is properly consulted throughout.

Recent engagements with the Eskom Board and the National Union of Mineworkers have reaffirmed these commitments. The Board confirmed support for government’s policy direction. Union discussions emphasised that both Eskom and the TSO will remain state-owned and that worker interests will be protected throughout restructuring. Such consultation is essential because transformation of this scale can only succeed if undertaken transparently with those affected.

South Africa has experienced successful sector transformation before. When telecommunications was dominated by a single fixed-line operator, telephone connections were expensive and access was limited, particularly in poorer and rural communities. Opening the sector to competition brought massive investment, new technologies and expanded mobile networks. Costs fell dramatically and services became accessible to millions. Today consumers choose between competing networks and providers based on price, coverage, technology and quality, while government continues regulating the sector and maintaining public oversight of critical infrastructure.

By contrast, electricity is an essential public service with particular requirements, and the national grid is a strategic asset that must remain under public control. Yet the principle applies. South Africa need not choose between a strong Eskom and other competitors. A state-owned Eskom can produce electricity alongside independent producers while a state-owned transmission system provides fair grid access and different generators compete to supply electricity at the lowest cost. This transformation can unlock billions of rands in investment in new generation and transmission infrastructure.

The purpose of electricity reform is not to privatise Eskom but to build a better system for ordinary South Africans. Households should enjoy more affordable electricity. Small businesses should operate without excessive energy cost burdens. Factories should expand production knowing they have access to reliable and competitively priced power.

Through determined reform, South Africa has already changed the trajectory of its electricity crisis. The next phase must ensure the country never again faces such a crisis, while progressively reducing power costs and extending electricity access to every household. The open question now is whether the institutions being built, the TSO, the competitive wholesale market, the reformed pricing framework, will prove durable enough to deliver on that promise for the next generation of South Africans.