Eskom enters 2026 with highest reserve electricity capacity in five years

South Africa returns to work in this second week of January with a more stable and predictable power system than in the past five years, Eskom says in a statement.

The power utility says we're entering 2026 with an additional 4,400 megawatts (MW) of capacity available compared to this time last year, resulting from the Generation Recovery Plan implemented in April 2023.

It is important to have this cushion of an energy surplus sitting in what's known as "cold reserve", affirms energy analyst Chris Yelland (EE Business Intelligence).

While acknowledging the improvement in Eskom's operational performance (remember loadshedding?), Yelland says we do need to keep in mind all the other challenges that are putting pressure on the utility.

Top of mind, of course, is declining demand for Eskom electricity as people turn to alternative energy sources, which is helping to drive steep power price hikes.

"You're trying to recover a certain cost base off a declining sales volume base, and whilst certainly there's been a dramatic improvement in the reduction of loadshedding, one has to be concerned about the decline in demand, which does not paint a healthy picture for a monopoly-type of utility. There are many issues Eskom faces besides the operational one - there's the cost of environmental compliance, the ability of municipalities to pay, rapidly rising increases in price resulting in increased theft and nonpayment..."

We're a long way from saying Eskom is out of the woods, despite the power surplus it is boasting, Yelland reiterates.

At the same time, there are suggestions that the utility is holding back reforms that would be in South Africa's best interests, he says.

Eskom is "quietly" pressing ahead with a damaging legal action with regards to the "stay" placed on its legal challenge against the National Energy Regulator of SA (NERSA) over the granting of electricity trading licenses to five private traders, Yelland writes in a report for MyBroadband. This in service to its own business interests, he says.

"There are suggestions which I'm just putting out there, that Eskom is deliberately creating significant uncertainty, which slows down the ability of traders to get money from banks and to enter into contracts with IPP generators to be able to sell power to offtakers. This legal action creates sufficient uncertainty to really block the emergence of these traders, which I believe is a very important solution to SA's problems going forward."

Scroll up to the audio player to hear more from Yelland on what may be happening behind the scenes at Eskom