Opportunity is knocking for South Africa

South Africa has an unlikely ally in its race to meet its decarbonisation targets: the private sector. Once government catches up, profits and economic development will follow while doing what is good for the planet.

Private generation goes renewable

The majority of South Africa’s coal-fired power stations are old, unreliable and inefficient, and delays in delivering new-build capacity exacerbated the country’s supply gap, leading to years of rolling blackouts.

In 2021, the cap for private generation projects was increased from 1 MW to 100MW as a measure to address the country’s energy shortfall. This, together with the decreasing costs of renewable energy, led to a rapid increase in rooftop solar installations for residential and commercial purposes. The latest International Energy Agency (IEA) World Energy Outlook shows that low-emissions sources of electricity grew by over 20% between 2018 and 2023 in South Africa – the majority of these generation sources were built by the private sector and individuals. Private rooftop solar installations alone almost tripled in the past two years, from 2.3 GW in September 2022, to 6.1 GW in September 2024, contributing to the end of rolling blackouts.

Original public domain image from Flickr

As the private sector turns to renewable energy solutions more and more, it should be clear to the public sector that this is not only good for the environment, but also good for the economy. If the government joins the renewable energy party in a real way, this could be an immense opportunity for South Africa. Not only to address the country’s energy woes and boost the local economy, but also to help meet the increasing demand for energy in Africa.

The land of opportunity

Africa is the continent with the fastest growing population and the fastest growing economy in the world. Economic opportunities in Africa are everywhere and the demand for energy will continue to increase. According to the World Economic Forum, roughly 85% of new energy demand in the coming years is expected to come from outside the developed world, and there is a clear need to create a new sustainable supply of energy.

According to Zero Carbon Analytics, clean technology accounted for 10% of global GDP growth in 2023, and the global market for six key clean technologies – solar PV, wind turbines, EVs, batteries, electrolysers and heat pumps – is forecasted to reach over USD 2 trillion by 2035 – a 186% increase from 2023. Global trade in clean technologies is set to reach USD 575 billion by 2035 – around 50% more than the value of global trade for natural gas currently. The supply of these technologies is a growth opportunity that many countries stand to capture.

A wind farm in Caledon, Western Cape. Photo by Charl Folscher on Unsplash

South Africa has favourable conditions across the key main requirements needed for clean tech manufacturing, according to the IEA. Amongst others, it is the country with the biggest wind resources in Africa. The country’s favourable conditions, paired with regional and global economic opportunities should be sufficient motivation for the government to focus on developing the renewable energy sector. The private sector has already seen the opportunity. With political will, South Africa is primed to become a leader in clean energy while growing its economy.