South Africans should be paying 80% less for electricity, according to MyBroadband’s analysis of Eskom’s financial data. The country has coal reserves, a growing renewable energy sector, and enough resources to deliver cheaper power. Yet households and businesses face steep electricity bills.
The real problem lies in mismanagement, corruption, and unpaid municipal bills. These issues have inflated Eskom tariffs far beyond what they should be. This article unpacks why prices are so high, what experts are saying, and how reforms could bring affordable power.
The Escalation of Eskom’s Costs
Rising Production Costs
In 2006, it cost Eskom about R147,748 to produce one gigawatt-hour (GWh) of electricity. Adjusted for inflation, this figure should be around R380,819 today. Instead, Eskom now reports a cost of more than R1.9 million per GWh.
MyBroadband’s analysis of Eskom’s reports shows a gap of over 400%. This has added an estimated R1.84 trillion in excess costs over two decades. As a result, analysts argue that South Africans should be paying 80% less for electricity.
Why South Africans Should Be Paying 80% Less for Electricity
Mismanagement and Corruption
Mega-projects like Medupi and Kusile were meant to deliver affordable energy. Instead, delays, corruption, and overruns pushed their combined costs from R160 billion to nearly R467 billion. These failures added huge debts, later passed on to consumers through higher Eskom tariffs.
Eskom’s Workforce and Maintenance
Eskom’s workforce peaked at 48,628 employees in 2018 before falling to 40,625 in 2023/24. A skilled team is vital, but inefficiencies and poor maintenance have left power stations unreliable. Meanwhile, breakdowns increase costs and keep tariffs high.
Municipal Debt Crisis
By November 2024, municipalities owed Eskom R95.4 billion in unpaid bills. This municipal electricity debt has crippled Eskom’s finances. Instead of fixing problems, the utility raises tariffs, leaving ordinary households to carry the burden.
The Role of NERSA in Electricity Prices
The National Energy Regulator of South Africa (NERSA) decides how much Eskom can charge. In 2025, it approved an average 12.74% tariff hike for 2025/26, far below Eskom’s request for 36%. Smaller increases of 5.36% and 6.19% were set for the following two years.
While these limits help, Eskom tariffs remain inflated after years of above-inflation hikes. In other words, even modest increases are hard to absorb when electricity is already overpriced.
For more details, visit the NERSA website.
The Impact on Families and Businesses
Household Strain
Electricity has become one of the biggest monthly expenses. Families are cutting back on food, transport, or school costs to keep the lights on. This is why South Africans should be paying 80% less for electricity; inflated tariffs are worsening poverty.
Economic Constraints
Businesses also feel the pressure. Manufacturing, mining, and small enterprises rely on affordable energy to stay competitive. However, high costs and municipal electricity debt limit investment and block job creation.
Expert Insights on the Price Crisis
Energy experts agree that South Africans are paying too much. If Eskom had controlled costs and avoided corruption, electricity would be up to 75% cheaper.
Experts recommend:
- Opening the grid to independent power producers (IPPs).
- Scaling up renewable energy projects in South Africa, which already cost less than new coal.
- Enforcing accountability in procurement.
- Tackling municipal electricity debt with stricter financial management.
In addition, analysts warn that without these reforms, electricity will remain unaffordable for most households.
Pathways to Affordable Power
Competition in Generation
Allowing more private producers could reduce reliance on Eskom. Studies by the CSIR and Meridian Economics confirm that renewable energy in South Africa is now the cheapest new-build option. Therefore, more investment in wind and solar is essential for lower costs.
Eskom’s Restructuring
In 2024, the National Transmission Company South Africa (NTCSA) was launched as part of Eskom’s unbundling. This separation of transmission from generation and distribution is designed to improve transparency. If implemented properly, it could stabilise Eskom tariffs and restore efficiency.
Strengthening Governance
Corruption and inefficiency remain the greatest risks. Independent oversight and strong governance are vital. On the other hand, without reforms, even renewable energy investment will not bring real relief.
For more on the government’s role, see the Department of Mineral Resources and Energy.
A Fair Energy Future
Electricity is a necessity, not a luxury. South Africans should not bear inflated costs caused by corruption, inefficiency, and municipal electricity debt. Experts agree: South Africans should be paying 80% less for electricity if Eskom matched global efficiency standards.
With greater competition, more investment in renewable energy in South Africa, and stronger governance, the country can move toward affordable, reliable electricity. Ultimately, lower tariffs are not only an economic need; they are a matter of fairness.
Read more in our report on how NERSA confirms the R54bn secret Eskom settlement — and why consumers will foot the bill.