Almost 90 percent of South Africa's electricity is generated in coal-fired power stations. Koeberg, a large nuclear station near Cape Town, provides about 5 percent of capacity. A further 5 percent is provided by hydroelectric and pumped storage schemes. In South Africa there are few, if any, new economic hydro sites that could be developed to deliver significant amounts of power.

Generation is dominated by Eskom, the national wholly state-owned utility, which also owns and operates the national electricity grid. Eskom supplies about 95 percent of South Africa's electricity. In global terms, the utility is among the top seven in generating capacity, among the top nine in terms of sales, and has one of the world's biggest dry-cooled power stations: Matimba Power Station.

Eskom was converted into a public company on 1 July 2002. It is financed by net financial market liabilities and assets as well as reserves. While Eskom does not have exclusive generation rights, it has a practical monopoly on bulk electricity. It also operates the integrated national high-voltage transmission system and supplies electricity directly to large consumers such as mines, mineral beneficiators and other large industries.

In addition, it supplies electricity directly to commercial farmers and, through the Integrated National Electrification Programme (INEP), to a large number of residential consumers. It sells in bulk to municipalities, which distribute to consumers within their boundaries. Access to electricity in 1994 was at 34%. Since 1994 INEP make it possible to electrify 5.977 million households which resemble 88% access to electrification nationwide.

Between January 2003 and January 2004, South Africa increased its electricity output by 7.1 percent, with a peak demand of 34 195MW on 13 July 2004, as opposed to the 31 928MW peak in 2003. Of the new capacity to be built, Eskom will target about 70 percent (in MW), with the balance from independent power producers (IPPs).

Due to a sharp increase in the demand for electricity, the Eskom Board of Directors took a final decision in 2003 for the return to service of the three power stations, Camden in Ermelo, Grootvlei in Balfour and Komati between Middelburg and Bethal, that were mothballed in the late 1980s and early 1990s. Unit 6 at Camden Power Station was then identified as the first unit to be commissioned. Another two units will be commissioned in 2006, three units in 2007 and the last of the eight units in 2008.