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Chitrika Grover07 Sep 2026 13:34 IST
South Africa’s energy system is undergoing a major transition, with persistent load shedding coming to an end as coal-fired power plants return to service and private-sector participation in the electricity market increases.
As the nation moves beyond the worst of its power crisis, private clean-power procurement is becoming a defining feature of South Africa’s electricity market, according to BloombergNEF’s (BNEF) South Africa Transition Factbook 2026.
Commenting on this shift, Nelson Nsitem, Africa Research Lead at BloombergNEF, said that private companies previously 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.
Nsitem added that expanding the grid and bringing down electricity costs will be critical to deploying more renewable energy and strengthening South Africa’scompetitiveness 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.
Growing Role of Corporate Buyers
Based on the growth seen in 2026, BloombergNEF noted that, for the first time, corporate power purchase agreements (PPAs) are driving more utility-scale renewable additions in South Africa than government auctions.
This highlights the growing role of corporate buyers in driving renewable-energy deployment through the end of the decade. BNEF expects corporate buyers to support 73% of the 2.3 GW of anticipated solar and wind additions in 2026.
The study identified transmission capacity as an emerging limiting factor in accelerating these investments, creating a gap between the pace of investment and grid expansion. Thereby preventing South Africa’s delivering as much economic growth as expected.
This is especially important because BloombergNEF associated the rise in clean-power investment with a decline in fossil-fueldemand. However, coal remains central to South Africa’s power system, supplying 78% of electricity in 2025, despite a 90% fall in coal demand from 2015 levels.
Under BNEF’s Economic Transition Scenario (ETS), which provides an economics-led view of how the power sector evolves, solar, wind and battery storage increasingly shape the country’s energy future.
As power consumption rises by 35% to 319 TWh by 2050, solar and wind are expected to expand to supply 69% of that demand, while coal’s share falls to 21% as aging plants retire and the coal fleet shrinks.
S. Africa’s Chinese Equipment Dependence Persists
Clean-energy equipmentplays a central role in the energy transition, but it is also increasing South Africa’s dependence on China. According to the BNEF report, China accounted for 98% of South Africa’s solar imports and 95% of its battery imports in 2025.
Across the region, China is also gaining market share 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 capacity and capture more value from the region’s growing clean-energy supply chain.
However, high power prices are hampering the government’s ambition to grow its critical-minerals industry, with average industrial electricity prices standing at R1,652/MWh last year, compared with R964/MWh in mainland China.
The report points to a pivot in South Africa’s decarbonization towards not just emissions issue through policies such as the EU’s Carbon Border Adjustment Mechanism (CBAM) increase pressure on emissions-intensive exports. Its industrial base is concentrated in energy-intensive mining and metals production, making these sectors central to the country’s decarbonization challenge.
South Africa has an edge in energy-transition supply chains as a major supplier of minerals, such as platinum-group metals, manganese and chrome. Despite this opportunity, the country captures little value downstream, as high power costs and infrastructure constraints weigh on competitiveness.
S.Africa’s EV Goal Revive Its Auto Competitiveness?
In the EV segemnet Africa is seeing sales more than doubled in 2025, although they still accounted for only 1% of the total South African passenger-vehicle market.
But the report noted that the sector is receiving incentives to produce EVs for both local and export markets. Its getting incentive from 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 towards EVs could support South Africa’s export competitiveness as major overseas markets transition away from internal-combustion engines.
South Africa Stays Largest Market in Sub-Saharan Africa
South Africa remains the largest renewable-energy investment market in sub-Saharan Africa, attracting $5.4 billion in 2025. However, renewable-energy investment fell 41% from $8.6 billion in 2024.
The report attributed the decline to a handful of utility-scale projects reaching financial close in 2025. Utility-scale solar investment fell 57% to $1.4 billion, while onshore wind investment dropped 30% to $2.1 billion. Small-scale solar bucked the trend, growing 35% to $1.8 billion and helping soften the overall decline.
The South Africa Transition Factbook 2026 examines how the country’s key sectors are being affected by the energy transition, where new opportunities and risks are emerging, and how mineral ree competitiveness and long-term growth
