Powering a Greener Future: SA Targets 3-5 GW of Renewables Annually by 2030
Image source: SolarQuarter
Coal presently supplies over 85% of South Africa’s electricity and has been a pillar of the country’s energy sector for decades. However, driven by global trends and environmental concerns, South Africa is now embarking on a serious transition toward renewable energy sources. In line with this move, the cabinet has introduced its first Renewable Energy Masterplan—a strategic blueprint that outlines the steps necessary to foster the growth of new renewable energy sectors nationwide. Researcher Ricardo Amansure from the Centre for Sustainability Transitions examines the multifaceted nature of this shift, considering its potential benefits for local communities, the ambitious targets of the master plan, the challenges ahead, and the measures required for effective implementation.
The Renewable Energy Masterplan
This Masterplan is a comprehensive industrial strategy designed to build a new manufacturing base focused on renewable energy technologies and battery storage solutions. Developed collaboratively, the framework reflects input from a diverse group of stakeholders—government officials, union representatives, nonprofit advocates for clean energy, and prominent figures within the renewable energy industry. Their joint effort has resulted in a strategy that prioritizes domestic production capabilities while advancing sustainable technologies such as solar photovoltaic panels, wind turbines, and modern storage systems.
National Targets and Industrial Clusters
The plan is closely tied to South Africa’s national goal of installing between 3 and 5 gigawatts of renewable energy capacity every year up to 2030. For context, one gigawatt can power around 700,000 average households. Realizing this target is essential not only for meeting domestic energy needs but also for establishing long-term local industrial clusters that could serve export markets. A stable and reliable renewable energy supply is vital for building investor confidence and encouraging companies to make long-term investments in these manufacturing hubs.
Investment, Job Creation, and Growing Demand
Although Eskom, the state-owned entity, has not yet committed to buying the projected 3–5 gigawatts annually, the government’s Integrated Resource Plan anticipates a growing need for renewable energy sources. The masterplan also aims to attract at least R15 billion (approximately $784 million) in investments by 2030, which is expected to create roughly 25,000 direct “green jobs” spanning industries such as manufacturing, logistics, engineering, and construction. Notably, job creation is a high priority, especially for the youth and semi-skilled workers.
A Just Transition
To ensure that the move toward a low-carbon economy is equitable, South Africa has already implemented a Just Transition Framework. This approach emphasizes fairness and inclusion to ensure that no worker, community, or region is left behind. The Renewable Energy Masterplan builds upon this foundation by offering targeted support to Black-owned businesses and community projects, particularly in areas anticipated to be severely affected by the decline of the coal industry. It is important to note, however, that while the masterplan sets broad industrial and employment goals, issues like recurring power outages and specific methods of electricity generation remain within the purview of general energy policies such as the Integrated Resource Plan and the Energy Action Plan.
Developing Renewable Energy Systems
In 2023, South Africa spent more than R17.5 billion (around US$905 million) on importing solar and battery technology. Many consider this expenditure excessive since the country has abundant reserves of critical raw materials—such as manganese, vanadium, platinum, and other rare earth elements—that are essential for manufacturing renewable energy systems and storage solutions. By tapping into these local resources, South Africa could reduce its reliance on imports while simultaneously nurturing domestic industrial growth.
Additionally, there have been notable improvements in the local production of key renewable energy components, including solar panels, wind turbine steel towers, and electrical cabling. Some South African companies even manufacture crucial parts like inverters and balance-of-system technology, which support solar and battery systems. The potential for further growth and innovation in this field remains substantial.
Fostering New Industries
The strategy envisages that manufacturers of solar, wind, and battery storage components will receive support through a mix of private investments and government subsidies. Incentives such as tax breaks, localization requirements, and assistance in establishing special economic zones are expected to drive this growth. With manufacturing demand on the rise, initiatives to pair offshore wind energy projects with next-generation, longer-duration batteries are also underway. The overall strategy lays out several specific goals to be achieved by 2030:
1. Accelerate Government Procurement:Fast-track the government’s purchase of renewable energy to ensure robust energy planning and grid improvements that facilitate new projects.
2. Establish a Manufacturing Sector:Develop a dedicated production base for essential components including wind turbine towers, solar mounting systems, and batteries.
3. Promote Inclusive Development:Ensure equitable access to green economic opportunities by supporting Black-owned firms, small businesses, and communities formerly reliant on coal.
4. Boost Local Skills and Innovation:Enhance collaboration between educational institutions and the energy sector to integrate renewable energy skills into national curricula and vocational training programs, supported by the Ministry of Higher Education.
Challenges Ahead
Despite its promising vision, the masterplan is not without obstacles. South Africa’s history of ambitious localization efforts in sectors like energy and automotive manufacturing has often been hampered by project delays and a lack of coordination between government ministries. Similar governance and implementation issues could affect the current plan if not addressed promptly. Furthermore, the existing power grid is a significant constraint—it lacks the capacity to handle a surge of new renewable energy connections. Eskom is estimated to need about $21 billion for necessary grid expansion, a development that will take considerable time. This situation creates uncertainty for renewable energy companies that require assurance of future demand before committing to substantial investments in infrastructure and workforce training. In addition, there is a marked shortage of renewable energy professionals, including technicians, electricians, installers, and engineers.
Key Requirements for Success
For the masterplan to succeed, several immediate actions are required:
- New Procurement Legislation:The government should introduce procurement laws that incorporate unambiguous and enforceable localization targets, thereby bolstering local manufacturers’ confidence.
- Policy Realignment:Current electricity policies, which continue to favor coal-fired power, must be revised to support the renewable energy masterplan.
- Grid Expansion Funding:Eskom may need additional financial backing from both the government and development lenders to accelerate necessary grid upgrades.
- Educational Reforms:Universities and training institutions should update their curricula to include courses in solar, wind, battery storage, and green hydrogen technologies.
- Incentives for Investors:The government should offer incentives to attract both domestic and international investors by reducing bureaucratic hurdles—such as long delays for environmental permits, property rezoning, and licensing—while still maintaining rigorous safety and environmental standards.
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