SA ELECTRICITY/ ENERGY INVESTMENT

South Africa Transition Factbook: Power-Market Reform and Private Investments Drive Energy Transition
BloombergNEF’s (BNEF) factbook shows that grid constraints and high industrial electricity costs will determine how much investment and economic growth can be unlocked across the country by the energy transition.
South Africa is now pursuing a wholesale power market and private grid investment, while an aging coal fleet and rail constraints emerge as new bottlenecks to exports and growth.
London, September 7, 2026 – South Africa’s energy system is undergoing a major transition as the nation has moved beyond the worst of its power crisis, according to BloombergNEF’s (BNEF) South Africa Transition Factbook 2026. Persistent load shedding has ended after coal power plants returned to service and private-sector participation increased.
Private clean-power procurement is becoming a defining feature of South Africa’s electricity market. In 2026, corporate power purchase agreements (PPAs) are set to drive more utility-scale renewable additions in the country than government auctions for the first time. BNEF expects corporate buyers to support 73% of the 2.3 gigawatts of anticipated solar and wind additions in 2026. Corporate buyers remain the main driver of renewables through the end of the decade.
Investors, developers and corporate energy buyers are planning further investment in clean power capacity, but transmission grid capacity is emerging as a limiting factor in how quickly these investments can go ahead. Without faster grid expansion, South Africa’s energy transition may deliver less economic growth than expected.
The rise in clean-power investment is helping to cut fossil-fuel demand, but coal is still central to South Africa’s power system, supplying 78% of electricity in 2025, down from 90% in 2015. In BNEF’s Economic
Transition Scenario (ETS), which gives an economics-led view of how the power sector evolves, solar, wind and battery storage increasingly shape the country’s future. As power consumption rises by 35% to 319TWh by 2050, solar and wind expand to supply 69% of that demand, while coal falls to 21% as aging plants retire and the coal fleet shrinks.
Nelson Nsitem, Africa Research Lead at BloombergNEF, said: “South Africa’s energy transition has reached a critical inflection point. To date, private companies have played a central role in bringing new clean power into the system, but the next phase will depend on whether infrastructure can keep pace with investment. Expanding the grid and bringing down electricity costs will be critical not only to deploying more renewables, but to strengthen South Africa’s competitiveness in industries such as critical minerals and manufacturing.”
Sofia Maia, Head of Middle East and Africa Research at BloombergNEF, said: “For many South African businesses, investing in clean energy is no longer primarily a climate decision — it is increasingly about securing reliable power, managing costs and having greater control over their energy supply. That change in motivation is reshaping the country’s power market and creating a much bigger role for private investment.”
According to BNEF, South Africa is becoming increasingly reliant on China for clean-energy equipment. China accounted for 98% of solar and 95% of battery imports in 2025. In the region, China is also gaining shares in wind (80%) and electric vehicles (84%) from the US and Europe by offering lower-cost products to a price sensitive market. As sub-Saharan Africa becomes a larger market for Chinese clean-tech exports, South Africa has an opportunity to build domestic manufacturing and capture more of the region’s growing clean-energy supply chain.
Other key findings from the report include:
South Africa’s industrial decarbonization is becoming a competitiveness issue, not just an emissions issue, as policies such as the EU’s Carbon Border Adjustment Mechanism (CBAM) increase pressure on emissions-intensive exports. South Africa’s industrial base is concentrated in energy-intensive mining and metals production, making these sectors central to the country’s decarbonization challenge. Coal’s dominant role in final energy demand highlights the potential for fuel switching and electrification to reduce industrial emissions.
South Africa has a strategic edge in energy-transition supply chains as a major supplier of strategic minerals, such as platinum-group metals, manganese and chrome. Despite the opportunity, the nation captures relatively little value downstream as high power costs and infrastructure constraints weigh on competitiveness. High power prices are hampering the government’s ambition to grow its critical minerals industry, with average industrial electricity prices sitting at R1,652/MWh last year compared to R964/MWh in mainland China.
South Africa’s EV strategy could revive its auto competitiveness. EV sales more than doubled in 2025, although they still accounted for 1% of the total South African passenger vehicle market. The sector is receiving incentives to produce EVs, for both the local and export markets, through measures including the enhanced Automotive Investment Scheme (AIS) and a 150% first-year tax deduction on investments in zero-emission vehicle manufacturing from March 2026. Shifting existing auto manufacturing capacity toward EVs could support South Africa’s export competitiveness as major overseas markets transition away from internal-combustion engines.
South Africa remains the largest market in sub-Saharan Africa renewable energy investment at $5.4 billion in 2025. South Africa’s renewable energy investment fell 41% from $8.6 billion in 2024. Fewer utility-scale projects reached financial close in 2025, with utility solar down 57% to $1.4 billion, and onshore wind dropping 30% to $2.1 billion. Small-scale solar broke the trend, growing 35% to $1.8 billion and softening the overall drop.
The South Africa Transition Factbook 2026 examines how the country’s key sectors are affected by the energy transition, where new opportunities and risks are emerging, and how mineral resources, local manufacturing and further policy reforms could shape competitiveness and long-term growth.