Eskom, which has reported a profit for the first time in eight years, is relying on digitalisation as it aims to become a greener and more stable energy producer.
The state-owned company, which was the utility everyone loved to hate, has transformed into an entity that currently provides reliable power, and has turned around operationally and financially following the implementation of a “generation recovery plan” two years ago.
“Eskom's stability and performance are vital to South Africa's growth and development, through sustained economic growth and job creation,” says CEO Dan Marokane.
It aims to deliver energy security in the evolving electricity industry, which demands customer-focused products and services to meet changing needs, enhanced grid capacity, and clean energy business models, it says.
Transforming South Africa's electricity supply industry demands a modern, flexible and digitally-enabled power system, it adds in its integrated report for the year to March.
“Cyber security threats, outdated legacy systems with control weaknesses and the need for predictive analytics and data management are being addressed through comprehensive digital transformation initiatives,” it states.
Eskom is implementing “advanced digital solutions” to enhance operational efficiency and governance.
“These initiatives will not only modernise our infrastructure but also position the organisation to lead in a decentralised, digital and decarbonised energy future,” it notes.
Chairman Mteto Nyati points out in the report that the global environment is one in which the energy sector is transitioning towards decarbonisation and digitalisation, among other imperatives, such as opening the grid up to the private sector.
Digital transformation is reshaping the energy sector, Eskom points out. “Technologies such as artificial intelligence and predictive analytics are enabling smarter grid management, operational efficiencies and improved forecasting.”
The global digital transformation market is projected to grow at almost 25% each year for the next five years. “For utilities, this presents opportunities to reduce costs, enhance reliability and improve customer service, although it introduces new cyber security and data privacy challenges,” the company notes.
Going digital is a “strategic imperative” and it will use technology to optimise operations. Digitalisation will also improve performance and keep up with the technology trends driving development of the electricity industry, Eskom says.
“We are accelerating investment in infrastructure, smart technologies and digitalisation across the value chain, by implementing advanced digital solutions to enhance governance,” Eskom says.
Green energy pipeline
Alongside its drive to digitise is a push to introduce more renewable energy into the grid.
It is engaging in strategic partnerships while establishing a renewable energy company – Eskom Green – to accelerate its participation in the green economy.
Under a government directive, the state-owned company has been splitting into smaller, more competitive entities to improve efficiency, while also encouraging private sector involvement, especially in green power sources, to add renewable energy to the grid and ensure more power is made available.
It states that the clean energy pipeline, to be driven by Eskom Green, includes at least 2GW of projects ready for execution in the short- to medium-term, with a longer-term pipeline of 5.9GW encompassing solar PV, wind, battery storage and gas-to-power projects.
Based on figures from the Southern African Power Pool, this means Eskom Green will ultimately produce what works out to 10% of its current installed capacity, while the private sector – through independent power producer plans – will add another 14GW to the installed power base, based on the latest available figures.
This comes as Nyati noted, during the results presentation yesterday, that Eskom had achieved 310 days of no load-shedding during the year to March compared with 2024, “which was a disastrous year… where we had record levels of load-shedding”.
Financial challenges
Despite returning to profitability – R16 billion profit versus a loss of R55 billion last year – the company still received a qualified audit because of incomplete or inaccurately maintained records in terms of the Public Finance Management Act, a situation it wants to resolve within the next few years.
There is also material uncertainty regarding Eskom's going concern status, driven by dependence on government support and uncertainties related to operational assumptions, including growing municipal debt.
Three months after launching its three-year Audit Recovery Programme to achieve unqualified audit status, it has closed 90% of audit findings that go back as far as 2021, although this still needs to be confirmed by the auditors. “But we continue with that momentum,” says CFO Calib Cassim.
One way it is improving its financial position is through the installation of smart meters, with a plan to roll out seven million of these in the next five years. Smart meters are seen as crucial to addressing the billions owed to Eskom by municipalities, which is already at R103 billion and could reach R300 billion by 2030.
Eskom is also fundamentally overhauling the way it manages costs by changing the way it does business and ensuring it sustains those efficiencies moving ahead. It is modernising procurement processes by introducing systems such as e-tendering, price verification tools, digital stock control and e-auction systems to improve spend control and monitoring.
Already, digitalisation and automation projects have improved revenue collection and operational efficiency. “These interventions have positioned Eskom on a clearer path toward operational resilience and future growth,” Nyati states.
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