Eskom’s Green Energy Shift: What 2027 Means for South Africa’s Power Market

For decades, Eskom has been the gatekeeper of South Africa’s electricity—reliant on coal, mired in debt, and struggling with load shedding.

But a quiet revolution is now underway. By 2027, Eskom won’t just be transmitting electricity or fighting to keep the lights on; it plans to sell renewable energy directly to large customers through a new Renewable Energy Offtake Programme.

This is more than a corporate strategy tweak—it’s a market reset that could reshape how South Africa buys, sells, and prices green energy.

What exactly is Eskom planning?

Earlier this month, Eskom opened bidding for 291 MW of solar power that will be generated on its own sites. Big players—think mines, factories, retail giants, and municipalities—can now sign long-term Power Purchase Agreements (PPAs) ranging from 5 to 25 years.

The kicker? The first projects are expected to go live by December 2027, with more phases rolling out thereafter. For companies chasing net-zero targets, this is the kind of opportunity they’ve been waiting for.

Why 2027 is the turning point

South Africa’s energy landscape has been shifting rapidly:

• Tariffs are climbing year after year. NERSA’s most recent decision pushes average increases to about 12.7% in 2025/26.

• Corporate demand for green energy is exploding. Exporters in mining, auto, and FMCG sectors face pressure from Europe and elsewhere to prove their supply chains are low-carbon.

• Grid constraints are biting hard. The transmission system urgently needs billions in upgrades to move renewable energy from resource-rich regions to demand centres.

Against this backdrop, Eskom’s move is not just about selling solar power. It’s about keeping hold of customers who might otherwise defect to private suppliers or generate their own electricity.

The “highest bidder” narrative—myth or reality?

Some headlines claim Eskom will sell to the highest bidders from 2027. That’s partly true, but it oversimplifies the story.

What Eskom has launched is essentially a competitive auction. Big users will submit bids not just on price, but also on contract terms, delivery timelines, and sustainability needs.

In practice, Eskom wants to match the right supply with the right demand, not just cash in on whoever offers the most money.

Think of it as a marriage between Eskom’s stranded solar potential and corporates desperate for green credentials.

Why corporates will line up

Here’s why demand is already strong:

• Cost certainty: A long-term PPA hedges against Eskom’s unpredictable tariff hikes.

• Green credibility: Access to verifiable green megawatts means easier compliance with sustainability frameworks like RE100 or Science-Based Targets (SBTi).

• Export survival: For exporters, decarbonised electricity is increasingly the difference between keeping and losing access to key markets.

In short, Eskom is dangling a rare win-win: stable pricing for corporates, and badly needed revenue for itself.

But there’s a catch: the grid

Here’s the elephant in the room—transmission lines. South Africa’s grid is stretched to its limit, particularly in the Northern and Eastern Cape, where renewable potential is highest.

To make Eskom’s 2027 promise real, the country needs to invest R450 billion in new grid infrastructure—about 14,500 km of lines over the next decade.

Without that, all the auctions in the world won’t bring electrons to where they’re needed.

International financiers are circling. The World Bank and other DFIs are discussing credit guarantees and blended finance packages to unlock grid investments. But unless this funding materialises quickly, Eskom’s green energy programme risks being gridlocked before it begins.

Will regulators let Eskom play both referee and striker?

Another brewing issue: competition. By selling renewable energy directly, Eskom is stepping into the same field as independent power producers (IPPs) and traders.

Critics argue this could trigger competition authority investigations, especially if Eskom’s market power disadvantages private sellers.

The good news? Eskom’s transmission subsidiary (NTCSA) has been unbundled with a mandate for open, non-discriminatory access.

If regulators enforce this properly, Eskom should compete on a level playing field. Still, it’s a space to watch closely in the run-up to 2027.

Three possible futures

So, what does 2027 actually look like? Here are three scenarios:

1. The success story: Eskom delivers 291 MW on time, more auctions follow, and corporates lock in cost-effective green supply. South Africa finally gets a functioning renewable PPA market.

2. The gridlock scenario: Transmission upgrades stall, leaving projects stranded. Auctions become oversubscribed, prices spike, and companies scramble for alternatives.

3. The middle road: Eskom rolls out capacity slower than hoped, but enough green megawatts reach the market to keep momentum alive.

What should businesses do now?

If you’re a large energy user in South Africa, here’s the playbook:

• Prepare your load profile—know your hourly demand and where you connect to the grid.

• Engage early in the auction process—the first movers often get the best terms.

• Think beyond 2027—hybrids (solar + storage) and wheeling deals may become available in later phases.

• Monitor grid expansion plans—your green energy ambitions will only go as far as Eskom’s transmission lines.

Eskom’s green energy shift is more than a pilot project—it’s a survival strategy. By 2027, the utility hopes to reinvent itself not as the coal giant weighed down by load shedding, but as a credible seller of renewable energy in a competitive marketplace.

Whether this is the start of a true transformation or just another Eskom promise depends on two things: the grid’s ability to catch up and regulators’ willingness to let competition thrive.

Either way, the race for green megawatts in South Africa has officially begun.

Also Read

Zahid Group Wins Approval for $1.25 Billion Barloworld Acquisition

SASSA Raises Red Flag on Illegal Grant Deductions