South Africa’s acute energy woes date back to 2007, when the country’s state-owned electricity supplier Eskom Holdings SCO had to devise a schedule for rotational power cuts, known as load shedding, as a way to distribute demand for electrical power across multiple power sources and prevent a nationwide blackout due to declining capacity.

Under the load shedding schedule, Stage 1 ran three times over a four-day period for two hours at a time, to shed 1,000 MW. Stage 8 was six times-a-day, or 12 hours, with 8,000 MW shed by Eskom. The stages fluctuated over the years, depending on demand, natural disasters, power plants being offline or repaired, and varied according to grid capacity throughout the country. As the situation worsened in 2022 and 2023, the stages increased.

The situation drove the development of an Integrated Resource Plan (IRP) in 2010, and a Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), which aimed to bring online 17.8 GW of renewable energy capacity by 2030. Pretoria also signed the Paris Agreement treaty on climate change, which prompted the government to set an ambitious target of net zero CO₂ emissions by 2050.

To achieve the necessary transition to green energy, the country would have to be weaned off coal, which accounts for 85% of power generation  and phase out the majority of Eskom’s 14 ageing coal-fired power stations, all commissioned between 1961 and 1996.

Despite $8.5bn mobilised from the US, UK and Europe through the Just Energy Transition Partnership (JETP) at the 2021 UN Climate Change Conference to enable the transition and implement the 2010 plan, South Africa’s power outages started to worsen, with 48 days of load shedding in 2021, 157 days in 2022, and 289 days – equivalent to 6,947 hours – in 2023, according to statistics from Johannesburg-based data insights provider The Outlier.

‘We are 10 to 15 years behind in our energy transition. South Africa started a globally renowned renewable energy procurement plan from 2010, which stalled in 2016. Since its relaunch in 2021 it has largely failed to deliver,’ says James Mackay, CEO of the Energy Council of South Africa.

However, these rolling power cuts did drive demand from the private sector and households to install solar photovoltaic (PV) power systems to take advantage of the country’s abundant sunshine and avoid using expensive-to-run generators. In July 2022, when the government released a new Energy Action Plan (EAP), power generation was liberalised (formally gazetted in January 2023), ending the requirement for a licence for generating systems up to 100 MW from the National Energy Regulator of South Africa (NERSA).

‘Load shedding was very detrimental from an economic and societal perspective, but the upside was that it forced a level of political engagement and partnership between organised business and government that wouldn’t otherwise have been realised. In 2023, we saw 2,600 MW of rooftop solar panels being installed. That is phenomenal, from almost nowhere,’ notes Mackay.

Abortive attempt at reform
André de Ruyter, who served as CEO of Eskom from December 2019 to February 2023, attempted to recover Eskom’s technical performance but claimed that looting of infrastructure, coal and funds stood in the way. Political interference hindering reform was also a serious concern. This instability was exacerbated by days of deadly rioting in July 2021 in the country’s key provinces of Gauteng and KwaZulu Natal following a court hearing for former President Jacob Zuma over alleged corruption.

‘While De Ruyter established a technical recovery plan, he largely failed to implement the plan and put the blame squarely on the shoulders of the African National Congress (ANC) government,’ comments Mackay. ‘De Ruyter put a smoking gun on the table, saying the politicians were part of this and you must own it. And he walked out of the room.’

Days after De Ruyter submitted his resignation in December 2022, he was reputedly served a coffee laced with cyanide at his Johannesburg office. He later left the country, penning an exposé of his time in office.

Further pressure started to mount on the government when in February 2023, South Africa was added to the Financial Action Task Force’s (FATF) grey-list for inadequate anti-money laundering controls. ‘The international community was saying South Africa was not serious about corruption. The CEO forum approached the President [Cyril Ramaphosa, in June 2023] saying this can’t be business as usual; we are in dire straits due to riots, the collapse of state-owned enterprises, the FATF listing. It was a turning point, as business and government launched a delivery partnership through the Energy Action Plan and from mid-2023 we suddenly had a joint technical plan and political support for the energy sector,’ continues Mackay. Kgosientsho Ramokgopa was also appointed Minister of Electricity in June 2023, to fix the energy crisis.

The shake-up was economically painful but ultimately focused minds, eventually leading to a successful recovery programme that reduced load shedding in 2024 and reached a 100-day milestone of no power outages in early July 2024.

‘People think load shedding miraculously disappeared, but it actually took a two- to three-year period and a crisis to get all the technical, financial and political support and actions in place, while business played a critical role in creating a delivery partnership and accountability across the board,’ comments Mackay.

More than 120 private sector projects with more than 12,000 MW of capacity are now slated to connect to the grid in 2024, according to government projections.

New government
In May 2024, parliamentary elections saw the ANC lose its majority for the first time in 30 years, resulting in a national unity government of seven parties, the second largest of whom is the centre-right Democratic Alliance (DA). As part of the new Cabinet, the Ministry of Mineral Resources and Energy was split into two new ministries – Mineral and Petroleum Resources, headed by Gwede Mantashe (of the ANC), and Energy and Electricity, headed by Ramokgopa, also an ANC member.

The split has been largely welcomed, but questions remain over how portfolios will be carved up between the ministries, says Darryl Hunt, Director of Dynamic Energy Consultants in Cape Town. ‘We know what mineral resources means, but what does energy and electricity mean? It’s really about upstream and downstream. Where does refining sit? Where do gas pipelines sit? There’s a lot of speculation. It all needs to tie up to legislation in the end, as we have to amend acts for which minister is responsible for certain legislation,’ he continues.

Despite heightened confidence in the economy since the elections, challenges still abound for rejuvenating the energy sector amid a sluggish economy and unemployment standing at 32.9%, according to government figures.

‘We’re keeping the lights on at 0.5% economic growth, but what if the economy kicks into economic gear to 1–2% growth, are we coming up against limits again?’ says Hunt.

Installations of rooftop solar power have slumped as load shedding has reduced. This is also due to an affordability constraint, as only 3% of households can afford rooftop solar power, according to Mackay. ‘A lot must be done to avoid a two-tier market of the haves versus the have-nots. If the corporations and wealthy defect from the grid due to cheap clean power, it leaves everyone else with dirty power, a falling-apart asset base and expensive power.’

Private sector investment in renewables is well below what the Energy Council projects as a minimum need of 5 GW/y of new renewable energy development to reach a target of 35% renewable energy penetration over the next decade.

The bigger challenge will be the phasing out of coal-fired power plants and what replaces them. ‘The number in my head is 10–15 GW being retired by 2035, which means a hell of a lot of megawatts need to be added to the system,’ says Hunt.

Eskom said in July 2023 that municipalities owed the company South African Rand ZAR 78bn ($4.3bn), and debt was growing by ZAR 15bn ($0.82bn) a year.

The electricity grid and distribution system also need a major overhaul, and for municipalities to settle their debts with Eskom. ‘Our whole network distribution system is in almost disrepair. There are no capital projects there, and municipalities are in control in certain areas, Eskom in others. The municipalities get their electricity, collect the proceeds, but don’t pay Eskom. It’s been a breeding ground for corruption in the distribution sector. Until we sort out these blurred lines between Eskom and municipalities, it could be a crisis of epic proportions,’ comments Hunt.

To try to improve the overall grid, the government has announced plans for more than 14,000 km of high-voltage transmission lines to be added to the grid through its Transmission Development Plan.

Meanwhile, the government has decided to delay the planned decommissioning of coal-powered power plants, which has put into doubt the country’s decarbonisation commitments. ‘We will have to work really hard to come up with transparent and robust plans that create confidence that we can ultimately deliver on accelerated decarbonisation through decommissioning of old and inefficient power stations to get back to our net zero commitments. To ensure international support and engagement, it is important that net zero remains the target, even although we may appear to have fallen behind that target,’ concludes Mackay.

• Further reading: ‘Solar power in South Africa: A bright future’. Solar energy is key for a clean energy future and, unlike fossil fuels, it won’t run out anytime soon. For South Africa, ongoing and widespread electricity supply interruptions make a transition to solar especially advantageous.
• South African President Cyril Ramaphosa has signed into law the country’s first climate change legislation that is expected to pave the way for the country’s transition to low-carbon and adapt its economy to the impacts of climate change.