Eskom Explores Bitcoin Mining to Offset 403 Billion Rand Debt

South Africa’s state power utility, Eskom, is exploring Bitcoin mining, data centers, and AI infrastructure as a strategic move to address its rising debt and declining electricity demand. This initiative is part of a broader strategy to utilize excess energy capacity, which has become more prevalent as renewable energy adoption increases and private energy generation expands. Eskom views these digital industries as potential new sources of revenue and job creation, essential for the utility's financial stability given its R403 billion debt burden and decreasing electricity sales.

Eskom’s CEO, Dan Marokane, highlighted the growing electricity needs in countries embracing Bitcoin mining and AI during the BizNews Conference. He emphasized that Eskom is evaluating how to leverage its baseload capacity to support these energy-intensive sectors. As more households and industries generate their own electricity, Eskom anticipates a continued decline in national demand over the next three to five years. Marokane stressed the urgency for Eskom to adapt its business model to mitigate further financial strain.

Despite these long-term concerns, Eskom’s immediate outlook remains challenging. Between June 13 and 19, unplanned outages averaged 15,076 MW, surpassing the threshold for stage 2 load-shedding. To prevent power cuts, Eskom has relied heavily on diesel-powered open-cycle gas turbines, with diesel usage doubling year-over-year to R4.51 billion in fuel costs. However, the utility expects diesel usage to decrease as more generating units return to service.

Bitcoin mining operations present a potential solution for Eskom’s unused electricity. The utility is investigating how mining, data centers, and AI applications, similar to those thriving in Texas, can generate revenue without compromising grid stability. Bitcoin’s energy-intensive proof-of-work model makes it sensitive to electricity pricing, and South Africa’s power surplus could attract miners seeking cost-efficient operations. This strategy could turn unused power into jobs and financial relief, as noted by a crypto analyst.

In addition to declining sales, Eskom is grappling with unpaid municipal bills. Regulator Nersa reported that municipalities owe R90 billion, describing the situation as critical. Energy Minister Kgosientsho Ramokgopa warned that this debt could escalate to R3.1 trillion by 2050 if left unaddressed. Amid these challenges, Eskom views new technologies like Bitcoin and AI as potential lifelines. The company is working to balance its current power struggles while laying the groundwork for a digitally powered recovery.