The 2025 Integrated Resource Plan (IRP) for electricity starts with the heroic assumption that electricity demand will grow by 2.3% a year over the coming decade. That premise contrasts sharply with recent patterns of energy use in South Africa. If acted on, it will lead to overinvestment in generation and transmission, with a rising share of the GDP paying for Eskom’s survival, escalating national debt and greenhouse gas emissions, and ultimately slower economic growth. The IRP expects electricity demand to exceed GDP growth, which it pegs at 1.5%-2% a year through to 2042. In practice that would contradict present trends. Since 2011 sales of grid electricity have declined 15%. That contrasts with a similar rate of increase in the GDP. Yet the IRP projects that electricity demand will grow at least 15% faster than the economy through 2042. That forecast underpins its aim of doubling generation capacity by 2042. This overly optimistic perspective matters because the IRP’s proposed investments carry a huge price tag. The IRP estimates the cost at R2.2-trillion through to 2042, or R130bn a year. The annual sum equals 12% of total public and private investment in 2025 and 1.7% of GDP. The IRP argues in effect that these investments will be viable because they will enable Eskom to end the restrictions it has placed since 2008 on sales to energy-intensive producers, mostly the metals refineries and the mines. But the hope of unlocking pent-up demand ignores the effects of the escalation in electricity prices. In real terms, Eskom’s tariff for mining and energy-intensive users escalated 280% above inflation from 2008-25. Eskom’s total revenues from these industries almost doubled in constant rand terms, even as their purchases of its electricity shrank by 24%. This overly optimistic perspective matters because the IRP’s proposed investments carry a huge price tag. The rapid increase in tariffs has largely eliminated South Africa’s main attraction for energy-intensive users. In 2008 the electricity price was about 40% below the average for upper-middle-income countries. Today, it is only 10% lower. The economic consequences are obvious. Energy-intensive producers have no particular reason to come to South Africa unless they can access cheaper renewable energy or get a price deal from Eskom. The ferrochrome refineries exemplify the results. In the past year most of them closed down because of soaring electricity costs. In response, Eskom plans to slash the price they pay to well under half the normal tariff. That strategy lets Eskom maintain its output, but in the long run it constrains its scope for cutting prices for other users. The IRP does not chart a path toward lower prices so as to realise its demand target. Indeed, it does not forecast electricity tariffs at all. It does anticipate that renewable energy and the associated battery storage projects will expand six-fold, rising to a third of total grid electricity by 2035. However, its main scenario also relies on six new gigawatts of gas generation capacity. Both renewables and gas (if used at full capacity) cost less than half as much as Eskom’s coal plants per kilowatt hour. The gas projects would require extraordinary growth in gas imports and handling facilities though. If the gas proposal fails the IRP expects to keep Eskom’s older coal plants in service beyond their planned obsolescence. The electricity & energy ministry presented this as the probable outcome in its media statement on the IRP. The likely result would be rising costs for coal electricity. The IRP’s assumption of accelerating electricity sales harkens back to half a century ago, when South Africa relied on cheap electricity to grow the mining value chain. That model is not viable today. South Africa has already paid a three-fold price for getting energy planning wrong over the past 20 years, in the form of higher tariffs, load-shedding and soaring national debt. We can no longer afford to let special interests, economic illiteracy and wishful thinking constrain our common future. • Makgetla is a senior researcher with Trade & Industrial Policy Strategies.