South Africa’s state-owned power utility, Eskom, is exploring unconventional avenues to generate revenue, including supporting Bitcoin mining operations and hosting large-scale computing infrastructure such as data centres. This strategic pivot comes as the utility grapples with a steady decline in electricity demand and mounting financial pressure.
A Utility in Transition
Eskom CEO Dan Marokane has acknowledged a fundamental shift in South Africa’s energy landscape. As more households and businesses adopt solar power and turn to independent energy providers, Eskom’s traditional customer base is shrinking. In 2024 alone, electricity consumption dropped by 3%, and the utility forecasts a continued decline over the next five years.
While reduced demand could, in theory, ease strain on the national grid and lessen the frequency of load-shedding, it also poses a serious financial threat to Eskom. With over R400 billion (approximately $22.3 billion) in debt, the utility is under immense pressure to find new, energy-intensive customers to replace the revenue lost from traditional users.
Bitcoin and Big Tech: A New Revenue Stream?
Enter Bitcoin miners and hyperscale data centres—industries known for their massive and continuous energy consumption. These operations could provide Eskom with the kind of stable, high-volume demand it desperately needs. By offering power to these sectors, Eskom hopes to monetize surplus capacity and diversify its income streams.
However, there’s a catch: Eskom’s power supply is neither stable nor competitively priced. The utility continues to suffer from frequent unplanned outages, with breakdowns recently pushing unavailable capacity beyond 15,000 megawatts (MW). This level of disruption would typically trigger 21 consecutive days of Stage 2 load-shedding during peak winter months.
To keep the lights on, Eskom has increasingly relied on costly diesel-powered generators—an unsustainable and unattractive solution for potential investors in energy-intensive industries.
A Risky Proposition
While the idea of monetizing unused electricity is sound in principle, Eskom’s current operational instability undermines its pitch. The utility is attempting to market a premium service to global tech firms and crypto miners while struggling to deliver consistent basic supply to its existing customers.
This initiative, therefore, appears less like a bold growth strategy and more like a last-ditch effort to stay afloat. Without first stabilizing its generation capacity and improving reliability, Eskom’s ambitions in the digital economy may remain out of reach.
The Road Ahead
For Eskom to successfully attract Bitcoin miners and data centre operators, it must address several critical issues:
- Grid Reliability: Consistent uptime is non-negotiable for tech firms and crypto operations.
- Competitive Pricing: Eskom must offer rates that rival global energy markets.
- Infrastructure Readiness: Hosting large-scale computing requires not just power, but also robust connectivity, cooling systems, and security.
Until these challenges are met, Eskom’s foray into the digital economy will remain speculative. As it stands, the utility’s survival hinges on its ability to do what it has struggled with for years: deliver reliable electricity.
