The South Africa power market cumulative installed capacity was 64.5 GW in 2021 and is expected to grow at a low compound annual growth rate (CAGR) of over 1% from 2021 to 2035, with the proportion of gas-based capacity and renewable power expected to grow rapidly during the same period, according to GlobalData, a leading data and analytics company.

South Africa generates most of its electricity requirement from coal-based capacity. More than 70% of installed capacity is achieved through coal. However, the country’s new Integrated Resource Plan (IRP) has called for the retirement of coal power plants.

Attaurrahman Ojindaram Saibasan, Power Analyst at GlobalData, comments: “In order to retire coal, the country needs to look at other energy resources to boost its electricity consumption and intends to increase gas-based capacity to maintain electricity supply. However, because South Africa does not have adequate gas reserves, it proposes to source additional gas supplies from neighbouring Mozambique and the other 14 member countries of the Southern African Development Community (SADC).”

GlobalData’s latest report, ‘South Africa Power Market Size and Trends by Installed Capacity, Generation, Transmission, Distribution, and Technology, Regulations, Key Players and Forecast, 2022-2035’, reveals that the main challenge facing the South African power sector is a very slow growth in electricity consumption, which can hamper both the country’s economic and power sector growth. Slowdown in demand has been driven by an increase in prices, as well as a sluggish economy.

The Southern African Power Pool (SAPP), which was established to provide reliable and economical electricity to its members and facilitate regional transmission development, is also playing an important role in helping to provide South Africa’s power supply needs. SAPP’s aim is to facilitate the development of a competitive electricity market in the SADC utilising the three electricity transmission corridors currently planned in the region.

Saibasan explains: “While working with SAPP and the SADC to achieve greater grid interconnection with Southern African countries provides a solution for South Africa’s energy security, it leads to dependency on other nations for electricity supply or gas imports, which is why the government is looking at renewable capacity development to manage this dependency.”

Under its IRP, South Africa is planning to add 2.5 GW of hydropower capacity, 6 GW of solar PV capacity, 14.4 GW of wind power capacity and 2 GW of energy storage capacity.

Saibasan adds: “The share of renewable power capacity in South Africa increased from 0.8% in 2010 to 15.1% in 2021. Renewable power capacity is expected to increase at a compound annual growth rate (CAGR) of 10.7% during 2021–2035 to reach an estimate of 40.6 GW by 2035 when it will constitute 48.3% of the country’s total installed capacity, according to GlobalData.”