After years of electricity shortages, Eskom is facing a very different problem: finding customers for power it doesn’t always need.
One potential answer? Bitcoin and cryptocurrency miners.
Eskom is exploring a two-year pilot that would offer location-specific electricity tariffs to crypto-mining operations able to rapidly increase, reduce or switch off their electricity consumption depending on how much power is available.
The proposal comes as improved generation performance and the growth of private solar generation reshape South Africa’s electricity system.
Why Eskom wants crypto miners
Crypto-mining operations offer something particularly useful to Eskom: flexibility.
“The good thing with the miners is that their operations allow them to ramp up as and when energy is available, and also to ramp down as and when that excess energy is not available,” Eskom’s head of distribution, Agnes Mlambo, said.
That would allow miners to consume electricity during periods of excess supply before reducing demand when the grid needs the capacity elsewhere.
Eskom chairperson Mteto Nyati first raised the possibility of selling surplus electricity to Bitcoin miners in March, and by April Mlambo said the utility was already in discussions with specific operators.
The proposal has since reached energy regulator Nersa, which is expected to publish a discussion document for public comment.
Eskom suddenly has electricity to spare
The proposal reflects how dramatically South Africa’s electricity position has changed.
Eskom said its financial year-to-date Energy Availability Factor had reached 67.87% by late August, its highest level in six years.
The utility also reported that thousands of megawatts of generating capacity were being held in cold reserve because supply exceeded demand.
At the same time, Eskom’s electricity sales have been declining as businesses and households increasingly generate their own electricity and other changes reduce demand for power from the utility.
Eskom’s latest financial results estimate that improved generation performance combined with a structural decline in sales volumes could produce surplus capacity of between 2GW and 3GW over the next few years.
Rooftop solar is changing daytime electricity demand
Private solar generation is another part of the equation.
As more homes and businesses produce their own electricity while the sun is shining, daytime demand for Eskom’s electricity is reduced.
This creates periods when Eskom has generating capacity available but not enough customers demanding the electricity.
Crypto mining could provide a flexible source of demand that responds to those periods of excess supply.
It’s not only Bitcoin miners Eskom wants
Cryptocurrency mining is one part of Eskom’s broader attempt to find new sources of electricity demand as its sales volumes decline.
The utility has identified data centres, electric vehicle charging and flexible loads among the areas where it sees potential growth.
It is also pursuing negotiated pricing agreements with energy-intensive customers, including smelters.
Eskom says its initiatives are aimed at stabilising electricity sales at around 178TWh over the medium term.
Nersa raises questions over cheaper electricity
The proposed crypto-mining tariff still has regulatory hurdles to clear.
Nersa members have questioned why discounted electricity should specifically benefit cryptocurrency miners rather than other businesses capable of adjusting their consumption according to available supply.
Concerns raised during regulatory discussions include potential price discrimination and whether similar tariffs should be offered to other flexible electricity users.
That leaves an important question at the centre of Eskom’s proposal: if the country has excess electricity available at certain times, who should get access to it at a lower price?
For Eskom, crypto miners could offer one answer to a problem South Africans would have struggled to imagine during the height of loadshedding: too much available electricity and not enough demand.
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