South Africa's state-owned power utility, Eskom, is seeking to offset losses in electricity sales by offering cryptocurrency miners a discounted tariff. The utility has proposed a benchmark tariff of R1.20 per kilowatt-hour (kWh) for participating customers. This move comes as Eskom faces a significant decline in industrial demand due to high electricity prices, which have surged over 800% since 2007.
Eskom's plan is to utilize excess electricity capacity, which is expected to increase as renewable energy projects come online. The utility anticipates having 5 terawatt-hours (TWh) of surplus energy by 2028, enough to power approximately 450,000 average South African households for a year. To manage this surplus, Eskom aims to attract cryptocurrency miners and other flexible-load customers with discounted tariffs.
The National Energy Regulator of South Africa (Nersa) has expressed support for Eskom's proposal, stating that cryptocurrency mining can both challenge and support electricity-system stability. However, Nersa also notes that unmanaged cryptocurrency mining may put additional pressure on system capacity, increase emissions, and create pricing distortions. The regulator is currently considering Eskom's proposed tariff relief.
According to Nersa, two cryptocurrency companies have already shown interest in participating in Eskom's pilot program, with a combined initial demand of approximately 10MW and potential expansion of up to 500MW. These companies are characterized by flexible, containerized infrastructure and a willingness to locate near generation facilities.
Eskom's proposed pilot program would apply for 24 months and incorporate time-of-use pricing and location-based pricing signals. The applicable electricity price would be determined by the voltage category, transmission zone, and operating period. This program aims to provide a mechanism for flexible loads to consume energy that might otherwise be curtailed while generating incremental revenue for Eskom.
The decline in industrial demand has had a significant impact on Eskom's revenue, with industrial demand plunging 22% in the past year. The sector paid a combined R115bn for electricity in the 2025/26 financial year, nearly R50bn more than they paid in the 2021 financial year. Eskom has been entering into negotiated price agreements (NPAs) to provide relief to high-energy users.
The outcome of Eskom's pilot program and its impact on the cryptocurrency mining industry and South Africa's energy sector remains to be seen. The program may provide a new revenue stream for Eskom and help to alleviate the pressure on industrial demand.
Key points
- Eskom offers cryptocurrency miners a discounted tariff of R1.20 per kWh to use excess electricity.
- The utility expects to have 5 TWh of surplus energy by 2028.
- Two cryptocurrency companies have expressed interest in participating in Eskom's pilot program.
