South Africa’s energy transition has reached a critical inflection point as persistent load shedding ends and private corporate power purchase agreements eclipse government auctions for the first time in 2026, according to a BloombergNEF report detailing market reforms, infrastructure hurdles, and industrial competitiveness pressures.
South Africa’s power system is undergoing a sweeping transformation as the nation moves beyond the worst of its electricity crisis. Persistent load shedding has ended thanks to returning coal power plants and surging private-sector participation, shifting the entire architecture of the country’s electricity market according to BloombergNEF’s South Africa Transition Factbook 2026. While state utility Eskom continues to generate the bulk of the nation’s power, corporate buyers are stepping in to reshape how clean energy enters the grid.
Corporate Power Purchase Agreements Outpace State Auctions
For the first time, corporate procurement is driving more utility-scale renewable additions than government auctions. Corporate buyers are expected to support 73% of the 2.3 gigawatts of anticipated solar and wind additions, cementing private investment as the primary engine for clean-power growth through the end of the decade.
Photo: greenbuildingafrica.co.za
This market shift reflects a fundamental change in corporate strategy across major industries.
“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.”
Photo: Africa Sustainability Matters
Sofia Maia, Head of Middle East and Africa Research at BloombergNEF
Major industrial players are aggressively cutting their reliance on Eskom through multi-layered procurement models. Anglo American has developed a substantial private renewable energy platform via Envusa Energy, its joint venture with EDF power solutions. Its Koruson 2 cluster combines the 240 MW Mooi Plaats solar project with the 140 MW Umsobomvu and 140 MW Hartebeesthoek wind projects for a total capacity of 520 MW. This framework utilizes electricity wheeling, allowing renewable power generated in the Northern or Eastern Cape to traverse the national grid and supply remote industrial mining operations under 20-year agreements.
Meanwhile, Sibanye-Stillwater is pursuing power purchase agreements rather than constructing its own generation assets.
Grid Infrastructure Constraints
Despite robust private capital inflows, physical access to the transmission grid is emerging as a critical bottleneck.
Nelson Nsitem, Africa Research Lead at BloombergNEF, emphasized the urgency of infrastructure development, warning that without faster grid expansion, South Africa’s energy transition risks delivering less economic growth than anticipated.
“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.”
Nelson Nsitem, Africa Research Lead at BloombergNEF
Regulatory Overhaul and the New Wholesale Market
Institutional reforms are attempting to modernize the regulatory framework to match private sector momentum. The country is pursuing reforms to establish a wholesale electricity market and open greater opportunities for private investment in the electricity grid.
Industrial Competitiveness, Trade Pressures, and Supply Chain Realities
The energy transition is increasingly tied to industrial competitiveness rather than emissions targets alone.
Supply chain dependencies present both challenges and opportunities. South Africa relied heavily on Chinese imports in 2025, with Chinese manufacturers accounting for 98% of solar equipment and 95% of battery imports. While this underscores a deep import reliance, it also opens avenues for domestic manufacturing to capture a larger share of the broader regional clean-energy supply chain.
Balancing Fossil Fuel Legacy with Long-Term Projections
Despite the rapid influx of private renewables, coal remains central to the nation’s immediate power supply. Coal accounted for 78% of South Africa’s electricity in 2025—down from 90% in 2015 according to transition data.
Talk Africa: Inside South Africa’s energy transition
Looking toward 2050, BloombergNEF’s Economic Transition Scenario projects that total power consumption will rise by 35% to 319 terawatt-hours. Solar and wind are projected to expand to supply 69% of that future demand, while coal’s contribution is expected to decline to 21% as aging plants retire and the coal fleet shrinks.
Whether transmission infrastructure can be expanded quickly enough to support this long-term shift—while simultaneously keeping industrial electricity costs manageable—remains the central unresolved question for the country’s private energy market.
Senior Editor, Economy
An award-winning financial journalist and analyst, Daniel brings sharp insight to economic trends, markets, and policy shifts. He is recognized for breaking complex topics into clear, actionable reports for readers and investors alike.
