• Private renewable capacity has surged as firms bypass the public grid

• Solar capacity rose 223% between 2019 and 2024 to over 13.5 GW

• Regulatory reforms have boosted self-generation and private power deals

South Africa’s decision on January 7 to ease competition rules for companies facing rising electricity costs has highlighted a broader shift. The country’s energy transition is increasingly taking shape outside the public sector.

Between 2019 and 2024, installed renewable capacity in South Africa rose by 129%, driven largely by solar power, whose capacity jumped 223% to more than 13.5 GW in 2024, according to data from the International Renewable Energy Agency (IRENA). Despite this progress, the national power system remains structurally fragile.

Power cuts, still frequent in 2024 and 2025, continue to weigh on economic activity, particularly in industrial sectors. In response, a growing number of companies have adopted strategies to reduce their dependence on the public grid.

Gradual adjustments by economic players

Since 2021, regulatory reforms introduced by the government have steadily expanded the scope for private sector participation. The removal of licensing requirements for generation projects of up to 100 MW has encouraged the rise of self-generation and the spread of private power purchase agreements (PPAs), especially in mining, industry, and agribusiness. Although many of these projects remain connected to the national grid, they are financed outside the public budget.

In this context, the targeted easing of competition rules now allows companies most exposed to high electricity costs to cooperate on shared energy solutions. These arrangements may involve the development of common infrastructure or collective procurement of power supplies. The measure primarily targets heavy industries, whose competitiveness has been eroded by more than a decade of steadily rising electricity tariffs.

Rapid growth in private capacity

According to official data from the Renewable Energy Independent Power Producer Procurement Program (REIPPPP), more than 6,000 MW of renewable capacity was awarded to independent producers between 2014 and 2024. These projects rely mainly on private financing.

At the same time, the development of behind-the-meter projects designed for self-consumption is accelerating. While output from these installations is difficult to quantify precisely due to the lack of centralized statistical consolidation, their rapid expansion reflects a shift in generation decisions toward the private sphere.

This trend is unfolding within an energy mix still dominated by coal, which accounts for nearly 70% of South Africa’s electricity production. Renewables, despite their growth, represented only about 17% of electricity generation in 2024.

Abdel-Latif Boureima