South African Business 2025

OVERVIEWEnergySolar is

OVERVIEWEnergySolar is shining.Moving massive wind turbines can be a tricky business.What The Economist says is happening in the world,GreenCape asserts is taking place in South Africa.Both the UK newspaper and the not-for-profitcompany concluded within a couple of months of oneanother in the middle of 2024 that solar is winning. The Economist’sspecial section on the topic made the point that the progress of solartechnology is so fast and so widespread that it almost doesn’t matterthat there is some resistance to it: the battle is over. Some statisticsput forward in the newspaper included:• The levelised cost of solar since the 1960s has gone down by afactor of more than 1 000• China’s solar panel capacity is 3.5TW• Battery operators in Texas recorded revenues in 2023 of 3-million• Whereas it took a year for the world to create 1GW of solar powerin 2004, it now takes days (Source: Michael Liebreich)Closer to home, GreenCape’s “Energy Services Market IntelligenceReport 2024” noted a 52% increase in rooftop solar PV installations inSouth Africa, to 3.2GW from the beginning of 2022 to the first quarterSECTOR INSIGHTWheeling is the nextbig thing.of 2023. They assessed thatmarket value at R41.6-billionand predicted that installedcapacity will increase by 2030to 10GW with a market value ofR130-billion.GreenCape also madeobservations about SouthAfrica’s automotive industry.Given that the US is likely towant to pivot away trade withChina, South Africa’s OEMs needto speed up the production ofelectric vehicles (EVs). The reportSOUTH AFRICAN BUSINESS 202552PHOTO: Nordex

OVERVIEWnoted that with many OEMs in the Eastern Cape, the creation of“large-scale renewable energy plants, such as wind and solar” wouldsupport this process. GreenCape market intelligence reports arepublished in partnership with UK PACT.One of South Africa’s most successful investment projects, theRenewable Energy Independent Power Producer ProcurementProgramme (REIPPPP), suffered a setback in the period between2015 and 2021 but investors are again queuing up to take a stake ingreener energy.According to the Presidential Climate Commission, the pipelineof REIPPPP projects stood at R377-billion in June 2024. Applicationsfor the development of 4.5GW were received in 2023, sharply upfrom the two previous years, 135MW (2021) and 1.6GW (2022). Theestablishment of a one-stop shop to deal with registering projectsis part of the reason for the expansion of potential new capacity.The problem is that South Africa has now come up againstthe constraints of the national grid. In the most recent round ofbidding for projects, the Northern Cape received fewer projectsthan it otherwise would have if the national grid was keeping upwith increased generation potential of new projects. This givesMpumalanga a comparative advantage. With most of South Africa’spower stations located in Mpumalanga, the issue of grid capacitydoes not arise.Automotive manufacturers have not gone all in on switchingto producing electric vehicles (EVs), not least because global andlocal consumers have been somewhat hesitant to commit fullyto EV options. There have also been calls from the industry fornational government to give guidance in terms of how muchsupport can be expected for the rolling out of incentives toproduce EVs and in terms of providing supporting infrastructure,such as charging points.Ford Motor Company, in announcing a range of investments attheir sites in Tshwane and Gqeberha, set aside an amount of R5.2-billion for the production of the hybrid-electric Ranger bakkie tobe built in Gauteng. Mercedes-Benz South Africa now makes twoplug-in hybrid-electric vehicles at its East London plant, althoughonly one of those is sold in South Africa.The Automotive Industry Development Centre (AIDC) EasternCape is taking steps to prepare the province for EVs through itseMobility and Climate Change Support Business Unit. A high-profileaspect of the unit’s work has been the creation of EV chargingstations in different parts of the Eastern Cape, including Gqeberha,East London and the Tsitsikamma. Education, research and thepromotion of the idea of EV travel, including through the conversionof bus fleets, form important parts of the work of the unit.WheelingAnother big change that has cometo South Africa’s energy landscapeis the concept of “wheeling”. Thisentails power being generatedspecifically for a customer and“wheeled” along the grid to thatcustomer from a supplier of energy.For this to work the grid has to beneutral and for that to be a reality,Eskom had to be unbundled, aprocess that has begun.The model might entail a highenergy-usecompany enteringa contract with a renewablescompany to supply it, as is thecase with the Impofu Wind Farmcomplex comprising three 110MWfacilities in the Eastern Cape, whichwill supply energy to Sasol and AirLiquide in Mpumalanga. Enel GreenPower and Red Cap are buildingthe R9-billion project. Anotherexample is the joint venturecalled Envusa Energy, which is thenew partnership between EDFRenewables and Anglo American.Envusa Energy is putting up 50Nordex turbines on Umsobomvuand Hartebeesthoek wind farmswhich form part of the Koruson2 cluster, a blended wind andsolar project which is partly in theEastern Cape and partly in theNorthern Cape.An alternate model isemerging with the creation ofenergy aggregators, companiesthat can buy and sell at scale.National regulations on how muchelectricity private generators couldsell fell away in 2023 and that hasliberalised and turbo-charged the53SOUTH AFRICAN BUSINESS 2025