Southern Africa’s renewable energy market appears to be entering a new phase, with companies increasingly looking to package solar, storage and flexibility into products designed around specific customer needs.
Dominic Goncalves, Advisory Partner for Energy Strategy at Cresco Project Finance and Founder & Director of Nafrica’s renewable energy market will be to transform variable electricity into differentiated products that solve specific customer needs and system problems
“Firming is the monetisation of variability: it converts electricity generated when the reower system values it most,” Goncalves explained
“Customers in Southern Africa rarely want the uncontrolled output of an individual renewable plant, they want a solution to a specific energy problem,” he added. “In 2026, there is an emerging product development opportunity and redesigning of commercial strategy towards what customers want, how those products are constructed and which companies may capture the value.”
Adding value to solar
Goncalves said a combination of changing market dynamics, including ongoing market liberalization, and technological advancements have created the conditions for Southern Africa to adopt more tailor-made products.
“We can now bridge the gap between what customers want and what people in the renewable energy business are able to achieve by using solar and wind as the main anchors and then bolting on additional services that create products and contracts that reflect added value,” he explained.
Customers are looking for solar to be dispatchable, predictable and shaped according to demand, Goncalves added.
“While a mine in Southern Africa typically wants reliable, competitively-priced baseload supply and reduced diesel dependence, a manufacturer in the region wants a shaped profile matching its operating hours and protection from peak prices while a data centre will be looking for high availability, measurable renewable matching and energy security,” he said.
Such considerations increasingly involve designing the physical and contractual solution backwards from the customer’s requirement.
“Buyers now value timing, shape, flexibility, reliability and contractual choice,” Goncalves added. “The next competitive advantage lies in designing and delivering those products.”
Goncalves also warned that companies who are unable to provide firmed or flexible power could increasingly find themselves pushed out of the market.
“Companies that continue to develop an asset first and search for an offtaker later may find that they have produced unwanted electricity, during the wrong hours, at the wrong location or with the wrong risk profile,” he explained. “Meanwhile, the rewards will be reaped by those who are able to provide firming value: converting intermittent renewable energy into predictable delivery profiles, dispatchable output and contractually guaranteed supply.”
Developing business models
Emerging business models in Southern Africa including subscription fees, availability payments, as-a-service models, PPA premiums, tolling arrangements and profit sharing, Goncalves explained.
While some of these aret development, for example under the planned South Africa Wholesale Electricity Market implementation and existing South African Power Pool
“However in some cases, first movers – for example in ancillary services and flexibility services – may help create those markets by translating an unmet system need into a measurable and buyable product,” Goncalves added.
Virtual power plants (VPPs) represent one of the clearer near-term product opportunities in Southern Africa, Goncalves continued, particularly for aggregating commercial, industrial and residential batteries, embedded generation and flexible demand. Elsewhere, demand-side management, industrial load reduction and forecasting, and optimisation software are key opportunities to address, particularly for industrial and mining customers in Southern Africa.
Goncalves suggested that one of the largest undeveloped product opportunities may sit at the intersection of transmission congestion and curtailment.
“Southern Africa still lacks widely adopted commercial products that combine storage, portfolio substitution and contractual risk allocation to protect buyers and generators when otherwise-available electricity cannot be delivered,” he explained.
New opportunities
Goncalves told pv magazine that the competitive landscape of renewable energy companies successfully operating in Southern Africa could look quite different by 2030.
“[These companies] are unlikely to be simply project developers, IPPs or traders,” he said. “There is an increasing pool of companies that are currently creating new types of products to address new types of needs, while progressive project developers, IPPs or traders embark on developing new products themselves.”
This shift, alongside the growing complexity of multi-technology solutions, opens new opportunities for entrepreneurs and companies to develop new products and solutions, Goncalves said, while new partnerships are expected to be key to successfully rolling out such products across the region.
“There are opportunities for partnerships because many of the solutions are complex, requiring multiple technologies and skills spanning different backgrounds,” he explained.
“One company may find it hard to develop an entire product offering in-house and may seek to partner to fill gaps. Meanwhile, there is international precedent to some of these products and solutions – international players would require local partners to successfully execute and roll-out product in Southern Africa, while local companies could draw on international experience as they localise and adapt those products for the local market and specific customers in the region.” Goncalves added.
“There’s plenty of space for everyone to take a look at solar and start to provide layers of value on it.”
Previous articles in this series covered the factors that are turning Zambia into one of Africa’s most attractive markets for renewable energy investment, the liberalization of Southern Africa’s electricity markets and the death of the traditional power purchase agreement in the region.
