Eskom Explores Bitcoin Mining to Tackle $22.7 Billion Debt

South Africa’s power utility, Eskom, is exploring innovative strategies to tackle its mounting debt of $22.7 billion. The utility is considering Bitcoin mining, artificial intelligence (AI), and data centers as part of its long-term plan to stay afloat. Group CEO Dan Marokane highlighted the need for new approaches to repurpose excess electricity capacity as the energy market evolves.

Eskom is facing a significant crisis due to declining electricity sales and a growing debt load. The utility's electricity sales dropped by 4% in 2023, and this trend is expected to continue for the next three to five years. Marokane described the situation as a "structural decline" driven by the increasing adoption of self-generation and independent power producers (IPPs).

Beyond operational challenges, Eskom is grappling with a deepening financial crisis. Municipal customers owe an additional R90 billion, and the total debt could reach R3.1 trillion by 2050 if left unchecked. Eskom is exploring alternative uses for its surplus generation capacity, including energy-intensive industries such as AI data centers and Bitcoin mining.

Bitcoin mining, though controversial, offers a potential outlet for surplus electricity. In the U.S., crypto miners and AI firms have become major energy consumers. These facilities often strike deals to reduce usage during high-demand periods, similar to Eskom’s load curtailment program. Eskom plans to replicate this model but faces challenges with its grid under pressure.

Between June 13 and 19 this year, Eskom reported average unplanned outages of 15,076 megawatts, triggering Stage 2 load-shedding. The utility has relied heavily on costly diesel-powered open-cycle gas turbines (OCGTs) to keep the lights on. Eskom’s OCGT load factor has more than doubled year-over-year, from 5.78% to 11.73%.

To date, Eskom has spent R4.51 billion on diesel this financial year, generating 768.64 GWh of electricity. This is more than double the 378.75 GWh generated during the same period last year. Eskom says diesel usage will likely drop as more power units come back online following long-term maintenance.

As Eskom prepares a $22.7 billion debt relief plan, the global spotlight on energy use, particularly from Bitcoin mining, is intensifying. A 2024 peer-reviewed study in Nature Communications revealed that U.S. Bitcoin mining facilities emit harmful fine particulate matter (PM2.5) across state lines, affecting nearly 2 million people. The 34 largest mining sites consumed 32.3 TWh of electricity, mostly powered by fossil fuels.

This has reignited global scrutiny on crypto mining’s power demands. While a Cambridge report showed a positive trend—52.4% of Bitcoin mining now uses sustainable energy—natural gas has overtaken coal as the dominant source, showing uneven progress. Eskom’s exploration of Bitcoin mining and AI as part of its strategy to tackle its debt highlights the utility's efforts to find innovative solutions amidst a challenging financial landscape.