- More than 50% of diesel imports exposed to Strait of Hormuz disruption.
- Renewables and battery systems emerge as long term hedge against fuel insecurity.
South Africa’s power system has shown marked improvement in recent months, but growing dependence on imported diesel and global supply disruptions are raising new concerns about energy security.
According to Eskom’s latest performance report, system performance indicators point to a more stable grid. For the financial year to date from 1 to 9 April 2026, the Energy Availability Factor reached 64.36%, up from 54.14% in the same period last year. This reflects a 7.6% improvement compared to two years ago, signalling better generation fleet performance.
Unplanned outages between 3 and 9 April averaged 8 981 MW, down from 13 930 MW a year earlier. This reduction of 4 949 MW, exceeding the capacity of a large coal plant, highlights improved reliability. The Unplanned Capacity Loss Factor declined to 18.75% from 29.35% in the previous year.
Planned maintenance activity increased slightly, with the Planned Capacity Loss Factor averaging 16.28% compared to 15.08% last year. This aligns with efforts to improve environmental compliance and long term sustainability. A further 2 132 MW remains in cold reserve due to excess capacity.
Diesel expenditure has fallen sharply to R49.81 million year to date, compared to R1.34 billion in the same period last year, a decline of 96.29%. Diesel use has been largely limited to reserve requirements in line with grid code provisions.
Despite these gains, advisory firm Cresco warns that South Africa faces two critical risks to energy security, electricity reliability and diesel dependency. The ongoing disruption in the Strait of Hormuz has exposed the vulnerability of diesel as a reliable backup fuel.
Diesel has historically served as the last line of defence for power systems, including in South Africa, due to its availability and flexibility. However, global supply shocks are now challenging this assumption. A simultaneous occurrence of load shedding and fuel supply disruption would place severe strain on diesel availability, particularly for critical services such as hospitals, data centres and industrial operations.
South Africa has experienced three major load shedding crises since 2008 and is currently navigating a global fuel supply disruption. A convergence of these risks could significantly impact both grid stability and backup power availability.
Although the reserve margin is currently stable, forecasts indicate a return to load shedding within the next three to four years if planned coal plant decommissioning proceeds without sufficient replacement capacity. Approximately 40% of the coal fleet is scheduled for retirement by 2035.
Energy modelling indicates a growing imbalance between supply and demand, particularly during morning and evening peaks. Increasing renewable capacity without sufficient battery storage or grid forming technologies is expected to drive greater reliance on diesel powered open cycle gas turbines for system balancing.
During the 2024 financial year, Eskom spent R26.6 billion on diesel, generating 3 634 GWh to limit load shedding. Since then, diesel consumption has dropped by 68% as usage shifted from emergency supply to intermittent peaking support.
However, structural risks in diesel supply are intensifying. As of March 2026, only two of five domestic refineries remain operational. Around 57% of South Africa’s diesel imports pass through the Strait of Hormuz, with the country now importing 70 to 75% of its refined fuel needs.
Since 2022, domestic refining capacity has declined to about 50% of pre 2020 levels. South Africa has transitioned from a relatively self-sufficient producer to a structurally import dependent market, increasing exposure to global price volatility and supply disruptions.
More than half of diesel imports originate from Gulf countries such as Oman, the United Arab Emirates and Bahrain, or indirectly via India. As the Hormuz disruption enters its sixth week, South Africa is competing with larger buyers in Asia and Europe for alternative supply.
While no national shortage has been declared, the country is experiencing price shocks, logistical challenges and localised supply constraints. The risk is amplified by the potential for a sudden increase in demand if load shedding returns.
Under stable conditions, Eskom accounts for 3 to 10% of national diesel consumption. During load shedding, this rises to 20 to 30%, while private sector demand also increases as businesses and households rely on backup generators. Any deterioration in grid performance could therefore trigger a sharp spike in diesel demand.
Eskom currently maintains a buffer of approximately 4.8 GW before reaching load shedding risk thresholds. However, stress scenarios show that multiple unit failures or constraints on diesel supply for peaking plants could quickly erode this margin.
In one scenario, simultaneous outages across several coal units combined with delayed recovery could lead to 4.5 to 6.5 GW of additional unplanned outages, triggering load shedding within days. In another scenario, even moderate outages combined with diesel constraints could exhaust flexible reserves and force power cuts.
In the near term, load shedding risk remains low but not negligible. Over the longer term, the probability increases, particularly from 2029 onward as capacity constraints deepen.
The current crisis highlights a structural shift in energy security thinking. Diesel can no longer be considered a fully reliable fallback option in the face of geopolitical risks.
Renewable energy systems combined with battery storage are increasingly seen as a more resilient alternative. High penetration microgrids, particularly those combining solar and battery storage, can reduce diesel reliance by more than 90%.
Advances in grid forming inverters enable these systems to provide seamless backup power during outages, reducing the need for diesel generators. This offers significant advantages for critical load customers, including lower fuel costs, reduced logistics requirements and improved resilience.
At a national level, accelerated deployment of battery energy storage systems will be essential to reduce reliance on diesel during peak periods. Current renewable energy expansion is not being matched by sufficient investment in storage and grid stabilisation technologies.
For commercial and industrial users, on site microgrids represent a strategic investment in long term energy security. As South Africa navigates an evolving risk landscape, reducing dependence on imported fuels is likely to become a central pillar of both cost management and operational resilience.
Link to Cresco’s full report HERE
Author: Bryan Groenendaal
