Key topics:
- South Africa faces power shortages with growing demand and reliance on coal.
- Renewable energy like solar and wind is underdeveloped but key for future.
- Decentralised microgrids could reduce reliance on Eskom and ease power strain.
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By Hanno Labuschagne
South Africa’s electricity landscape will shift radically over the next few years, with households and businesses increasingly relying on decentralised power generation and distribution.
While the country already has insufficient electricity supply to meet demand at all times, the situation could become dire in the near future.
Energy demand is expected to pick up significantly as the economy and population grow.
It could be exacerbated by the adoption of electric vehicles and the expansion of AI-infused data centres.
Commenting on the back of the most recent round of load-shedding, energy expert Chris Yelland highlighted three major power sector risks facing South Africa and its economy:
- 90% dependence on Eskom as the country’s main electricity supplier
- 80% dependence on coal-fired generation
- Dysfunctional electricity distribution
Just 15 Eskom coal-fired stations supply over 80% of the country’s electricity demand, but most of these are decades old and are becoming increasingly expensive to maintain.
While Eskom has had some successes in improving the reliability of its fleet, it has repeatedly missed energy availability targets.
Even if these coal plants could increase their output significantly, South Africa could not continue to rely so heavily on fossil fuel-based generation.
Like many other countries worldwide, South Africa’s electricity supply must transition from coal to cleaner energy sources to reduce environmental and human health impacts.
Fortunately, South Africa has abundant solar and wind energy — the two most popular forms of renewable generation.
There are already several utility-scale solar and wind farms in South Africa.
Wind power farms in the country typically have around 140MW capacity, while solar farms have roughly 100MW.
However, the capacity of even the biggest solar and wind farms pale in comparison to that of Eskom’s smallest and oldest coal power stations.
While dozens of solar and wind farms have come online in recent years, they still contribute less than 20% to South Africa’s overall energy mix.
In addition to taking a long time to reach financial close and finish construction, there is no more transmission grid capacity in the three Cape provinces, which are the most attractive to large renewable independent power producers (IPPs) for their high solar and wind resources.
South Africa must extend its transmission network by 14,000km and transformer capacity six-fold by 2033 to ensure sufficient utility-scale generation can be installed to meet demand.
The government wants to rope in more private players to assist in this effort, as Eskom is currently only expanding the network by about 300km per year.
According to the Energy Market Projections report by Standard Bank and Cresco Group, the current rate of electricity expansion planned by the government will see South Africa only meeting its existing energy demand by 2040.
Adding further complexity is the fact that renewable generation can be highly inconsistent and will require batteries and pumped storage dams to hold excess energy for dispensing when required.
Killing all the birds with one stone
Decentralised electricity addresses the transition away from fossil fuels and the shortage of transmission capacity and competition.
In a decentralised setup, electricity comes from thousands or even millions of small-scale power plants rather than just a handful of sources.
While wind farms are generally located far away from cities due to noise pollution, solar and battery infrastructure can be brought close to where the electricity needs to be used.
Placing the electricity generation and distribution software right at the doorstep of users eliminates the need for vast and expensive transmission infrastructure.
Eskom itself has also seen the potential of microgrids, particularly in terms of saving costs and time.
The rise in microgrids will result in more competition with Eskom as there are private companies that have the financial means, skills, and motivation to roll out microgrids rather than utility-scale power stations.
The decentralisation process won’t be without challenges.
Electricity networks and infrastructure are complex and dangerous if not worked on by professionals.
Unlike in the past, there will be a myriad of IPPs and private users connecting their systems to the greater grid.
Authorities will have to ensure that the necessary technical and safety standards are followed to protect the grid’s integrity.
Distributors have lagged in developing and promoting their embedded generation policies, creating great uncertainty among households and businesses about how they should proceed to ensure their system is legally compliant and safe.
However, those who have installed embedded generation have already contributed to alleviating the strain on Eskom’s fleet by reducing their grid demand.
The utility has explained that the additional power generated by “behind-the-meter” rooftop solar during the day enables it to replenish emergency generation reserves for peak evening and early morning demand.
Eskom has estimated that this capacity — which includes private home and microgrid systems — had reached nearly 6,200MW by January 2025.
The fact that 4,000MW of the behind-the-meter capacity was added in roughly two and a half years shows how decentralised power can scale rapidly.
Over the same period, utility-scale renewable capacity had increased by less than 500MW.
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This article was first published by MyBroadband and is republished with permission.
