In this opinion article, Energy Council of South Africa CEO James Mackay argues that the recent shock return of Stage 6 loadshedding does not signal a return to the dark days of 2023. However, he also warns that without accelerating reforms and investment, South Africa could face a renewed crisis as early as 2028.

South Africans woke up to unwelcome news this past weekend: Stage 6 loadshedding. After 300 days of uninterrupted power, we had almost stopped counting the days since loadshedding, but now many are understandably asking: Are we back to square one?

The short answer is ‘no’. We have moved beyond the structural daily loadshedding of 2023, through a significant joint effort by government, Eskom and business, supported by rapid private sector investment into new generation.

While these efforts brought an earlier-than-expected reprieve to loadshedding, the reality is that our energy system remains fragile.

Eskom continues to tackle the challenge of poor station reliability, and without accelerating crucial reforms and investment, South Africa could face a renewed energy crisis as early as 2028.

What happened to cause stage 6?

The technical chain of events was explained on Sunday by the Eskom Group Chief Executive. In brief, an operational fault at Majuba power station triggered electrical protection on an HV transformer, causing multiple trips that shut the entire station.

A separate plant reliability incident at Camden power station resulted in a cooling water shortage, tripping four additional units and pushing the country to Stage 6 loadshedding early on Sunday morning.

A few key points are worth noting.

Firstly, these stations are among the better performers in the fleet, consistently meeting or exceeding Eskom’s 2024 energy availability factor (EAF) target of 64%. While it is encouraging that these were not structural losses of capacity as was seen with the collapse of the Kusile duct, it underscores the deep reliability challenges and the difficulty of achieving a stable 75% EAF.

Secondly, these station trips caused a major system frequency drop, the biggest risk factor for a grid blackout. In fact, a Medupi unit did trip on Sunday night, due to low system frequency, demonstrating the seriousness of the incident, but it also provides confidence that the country’s System Operator and broader system protections are in place and working.

Eskom’s swift and transparent response was also notable. The Minister and Eskom’s Chief Executive briefed the country on Sunday morning, committing to further root cause investigations.

By Sunday afternoon, five units were already back online, and loadshedding was quickly reduced to Stage 2. Early Wednesday morning, to the relief of the country, Eskom announced the suspension of loadshedding.

Despite progress in stabilising and improving fleet reliability, setbacks like this will continue to occur.

To permanently eliminate loadshedding, grow our energy sector and importantly, prepare for the targeted decommissioning of coal generation from 2030, we need to pick up the pace of reform implementation and focus on building as quickly as possible.

Keep in mind that the 2030 decommissioning will target the high-cost, low efficiency stations with non-compliant air quality challenges. This is in contrast to the newer stations like Medupi and Kusile, designed to operate to beyond 2070 and offer higher efficiency, low operating costs and some emissions abatement technology.

This is not a return to 2023 levels of loadshedding

I am confident that South Africa will remain free of structural loadshedding for the next 3 years based on the rapid growth in new generation investment by the private sector.

Loadshedding prompted an immediate response in rooftop solar exceeding 2 300 MW in 2023. It has taken longer to develop utility scale projects, but Q4 of 2024 could be regarded as peak investment well exceeding R30-billion in just the last quarter of the year. These investment decisions will support continued construction and new generation connection between 2025 and 2027.

Wind and solar generation are abundant and cost-effective, but they must be paired with growth in battery storage and gas to power (GtP), as well as system modernisation to provide stable and reliable power.

Our view is that South Africa will need circa 5 GW of renewable power connected a year, plus by 2035, approximately 7 GW of GtP and up to 12 GW of battery storage to allow a stable energy mix incorporating approximately 40% clean power, which is still a conservative target in global standards.

What needs to happen next?

The collaboration and capacity mobilised through the Business-Government Partnership has helped propel critical reforms, including the promulgation of the Electricity Regulation Amendment (ERA) Bill, the legal separation of the National Transmission Company South Africa from Eskom, the launch of the Wholesale Electricity Market Codes, the creation of the National Energy Crisis Committee to address implementation, a dedicated electricity ministry to provide political and policy leadership, and lastly, the progressive opening up of private sector competition through wheeling.

While these are all very positive steps directionally, as emphasised in the President’s State of the Nation Address (SoNA), we must move from policy to urgent and effective implementation in 2025.

As outlined above, loadshedding forced investment at speed and scale that otherwise would not have occurred and this has gifted us a window of opportunity to 2027.

From 2028 onwards, however, the risk of another national energy crisis is a reality. The rapidly changing regulatory landscape, restructuring of tariffs, changing rules for access and permitting, and the stalled grid capacity from 2028 is creating significant uncertainty for investors.

The increasing tension between the private sector and Eskom with regards to competition and non-discrimination is also increasing the threat of a legal challenge, which would be a major setback for the energy sector.

Key priorities we must resolve in 2025 to maintain investor clarity and confidence are:

• Clarify and codify non-discriminatory rules for competitive generation investment.
• Keep the 2026 wholesale electricity market launch on track. Public-private readiness is crucial for financing the energy transition.
• Ensure incremental grid expansion from 2028 through “curtailment” and “self-build” investment.

As highlighted above, there is little to no new capacity being unlocked under the Transmission Development Plan until the major corridor upgrades are complete, post 2032.

Lastly, I would be remiss not to mention the significant challenge of dealing with municipal reform and ensuring sustainable and reliable local electricity services.

It was very encouraging that the President gave clear direction on this topic in the SoNA by announcing that municipal reform will follow a Utility Model, that will address efficiency and performance through competition.

Mackay is Energy Council of South Africa CEO and B4SA Energy lead for the Government-Business Partnership.