GlobalData’s latest report, ‘South Africa Power Market Outlook to 2035, Update 2022 – Market Trends, Regulations, and Competitive Landscape’, discusses the power market structure of South Africa and provides historical and forecast numbers for capacity, generation and consumption up to 2035. Detailed analysis of the country’s power market regulatory structure, competitive landscape and a list of major power plants are provided. The report also gives a snapshot of the power sector in the country on broad parameters of macroeconomics, supply security, generation infrastructure, transmission and distribution infrastructure, electricity import and export scenario, degree of competition, regulatory scenario, and future potential. An analysis of the deals in the country’s power sector is also included in the report.
The South Africa power market cumulative installed capacity was 64.5GW in 2021 and is expected to grow at a low compound annual growth rate (CAGR) of more than 1% from 2021 to 2035, with the proportion of gas-based capacity and renewable power expected to grow rapidly during the same period.
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.
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 ).
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.
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 2.5GW of hydropower capacity, 6GW of solar photovoltaic (PV) capacity, 14.4GW of wind power capacity and 2GW of energy storage capacity.
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 CAGR of 10.7% during 2021 to 2035 to reach an estimate of 40.6GW by 2035, when it will constitute 48.3% of the country’s total installed capacity.