Eskom is courting the world’s largest technology companies as buyers for a power surplus it cannot otherwise shift, chairman Mteto Nyati told the Financial Times on Wednesday. But South Africa’s biggest data centre operator says the industry’s problem is not a shortage of generation.
Nyati said Eskom was in discussions with “the Amazons, the Microsofts, the Googles”, describing them as exactly the sort of power-hungry customers the utility needs after a generation recovery that has kept load shedding off the system for more than a year. “We’ve got this power that we cannot sell,” he told the London-based newspaper.
Asked by TechCentral, prior to the publication of Wednesday’s FT article, where the real constraints lie, Teraco head of sustainability Bryce Allan pointed somewhere else entirely.
“The primary constraint is not linked to generation capacity itself, as South Africa currently has a generation surplus of between 3-6GW,” Allan said. “The main constraint facing the industry relates to connecting and unlocking new renewable energy capacity through grid access and frictionless wheeling to enable the data centre industry to meet near-term ambitions for 100% renewable energy.”
That is close to the inverse of the pitch Nyati made to the FT. Teraco does not want to buy Eskom’s surplus; it wants Eskom’s wires to carry power it has contracted elsewhere.
Allan was explicit about the role he sees for the utility, telling TechCentral: “Eskom plays an important role and will continue to supply us with physical energy, enabling the transmission and distribution of electricity from our own and contracted renewable energy production.”
Backup supplier only?
Teraco expects more than half its consumption to be covered by new-build renewables by the end of next year. It has a 120MW solar plant under construction, with mechanical completion and commissioning due in the fourth quarter of 2026 and testing complete in early 2027, after which it will export to the grid for wheeling to the company’s data centres in Ekurhuleni and Cape Town.
Teraco has also signed wind power purchase agreements with NOA, a Cape Town-based renewable energy aggregator that wheels power from its own generation fleet and from third-party independent power producers. The first project under those agreements is expected online in the second half of this year, with wheeled energy following shortly afterwards.
Read: Eskom fixed the fleet and the customers left
Battery storage is being explored with partners, which Allan described as “a critical enabler to accelerating our path to achieving 100% renewable energy ahead of our 2035 target”. He did leave a door open for the utility. The same wheeling path, he said, “is also open to the likes of Eskom Green, which we see as an important entrant to the sector in driving the growth of renewables in South Africa going forward”.
Teraco has been making this argument for months. In February, chief executive Jan Hnizdo told TechCentral that a frictionless renewable energy wheeling framework between Eskom, municipalities and data centre operators was key to continued investment in the sector, and would allow Eskom to invest in the transmission infrastructure the country needs.
Chris Hattingh, executive director at the Centre for Risk Analysis, made the same point to the FT from the other direction, saying the strategy solves Eskom’s revenue problem only if it can hold these customers as “anchor tenants rather than backup suppliers”.
Allan also complicated the scale of the opportunity. The gigawatt-class AI campuses being built in the US, China and the Middle East house large training workloads requiring thousands of GPUs running simultaneously, he said. South Africa will be different.
“AI deployment in South Africa will be driven primarily by inference rather than large-scale model training,” he explained. “By its nature, AI inference workloads rely on smaller and more efficient cluster deployments. These inference-led deployments avoid the complex grid connection challenges associated with the large multi-hundred-megawatt builds, and local data centre operators are already well positioned to support cloud and AI demand with existing capacity.”
He framed that growth as an opportunity to reverse the decline in South Africa’s industrial demand, stabilise electricity consumption and anchor new renewable generation – a more modest proposition than a gold rush, and one in which Eskom’s role is carrying power rather than making it.
The market itself is not modest. South Africa hosts roughly 70% of Africa’s data centres, and research firm Arizton expects the local market to more than double to over US$5-billion by 2031, the FT reported. Cape Town approved two Equinix facilities in July requiring about 170MW between them – approaching the roughly 189MW of critical capacity Teraco runs across its entire estate. Government designated data centres critical infrastructure in February, putting them on the same footing as electricity and ports.
Cold storage
Eskom’s surplus may also be less settled than Nyati’s pitch implies. The utility said in April it would decide by the end of September whether to shut down, repower or repurpose five of the country’s oldest coal-fired stations – Camden, Grootvlei, Hendrina, Arnot and Kriel – which are operating on emissions exemptions until March 2030.
Eskom has about 2GW in cold storage that could return to service without straining the system, but analysts told the FT that planned data centre investment could still overwhelm the current grid.
Selling to a new class of customer is not straightforward either. When Eskom set out plans to sell surplus daytime power to bitcoin miners, distribution head Agnes Mlambo told TechCentral that any tariff or commercial structure for a new customer class requires Nersa approval, and that the regulator must run a public consultation before a pilot can begin. The same constraint would apply to a bespoke hyperscaler tariff.
Read: Ramaphosa signs off on taking the grid away from Eskom
Eskom did not respond to repeated requests for comment from TechCentral over several weeks on the impact of data centre construction on the grid.
Eskom went into winter with about 6GW of surplus peak capacity, its strongest reserve margin in nearly a decade, on the back of a 5.2GW reduction in unplanned losses. Its energy availability factor reached about 65.35% in FY2026, up from 54.55% in FY2023; the FT put the figures at 66% this year against about 50% when Nyati became chairman in 2023.
The utility carries debt of about R359-billion, according to the FT, following a R254-billion government relief package, with municipalities owing roughly R118-billion between them. Nyati warned that if arrears keep climbing, the operational recovery will be undone. – Reporting with assistance from Tinashe Mazodze, © 2026 NewsCentral Media
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