Intensive energy users warn of industrial jobs bloodbath as Eskom’s tariff increases loom

INTENSIVE energy users in South Africa are sounding the alarm over rising costs and impending job losses, as recent decisions by the National Energy Regulator of South Africa (Nersa) threaten the financial viability of crucial industries.

- BANELE GININDZA

The Energy Intensive Users Group (EIUG) on Tuesday raised concerns that Eskom’s recent settlement of R54 billion electricity price determination could lead to significant increases in electricity tariffs, which already account for up to 40% of production costs for some users.

As a result of the miscalculation, electricity tariffs, which were initially set to rise by 5.4% in 2026 and 6.2% in 2027, will instead spike by 8.8% over the next two financial periods to compensate for the Nersa blunder.

The new tariffs, expected to take effect in the 2026/27 financial year and into the next term (2027/28), are three times higher than the anticipated consumer inflation rate.

EIUG CEO Fanele Mondi stated that price increases, volatility, and uncertainty are major factors contributing to operational shutdowns and low investment levels in the South African market.

"Additionally, there is the matter of reported Regulatory Clearing Account (RCA) settlements which, if true, will be an added burden to consumers, not to mention outstanding RCA decisions that have not been liquidated yet," Mondi said.