BloombergNEF’s South Africa Transition Report: Energy Market Reforms and Private Investment Propel Energy Shift

South Africa’s Energy Transition: Key Insights from BloombergNEF’s 2026 Report

Date: September 7, 2026
Location: London

South Africa is making significant strides in its energy transition following the end of persistent power crises. BloombergNEF’s South Africa Transition Factbook 2026 indicates an increase in private sector engagement, particularly in renewable energy.

Key Highlights:

1. Shift to Private Clean-Power Procurement: By 2026, corporate power purchase agreements (PPAs) are expected to surpass government auctions in driving utility-scale renewable energy additions. Corporate buyers will support 73% of the 2.3 gigawatts forecasted for solar and wind projects this year.

2. Transmission Grid Capacity Challenges: While investments in clean power are on the rise, the lack of sufficient grid infrastructure may slow down progress, impacting potential economic growth tied to the energy transition.

3. Coal’s Continued Role: Despite a decline from 90% in 2015 to 78% in 2025, coal remains a mainstay in South Africa’s energy landscape. However, projections suggest a shift towards renewables, with solar and wind expected to meet 69% of power demand by 2050.

4. Impact of Infrastructure on Competitiveness: Nelson Nsitem from BloombergNEF emphasizes that the energy transition’s success depends on infrastructure—expanding the grid and reducing electricity costs are crucial for competitiveness in sectors like manufacturing.

5. Corporate Motivation Change: Sofia Maia notes that businesses are now driven by the need for reliable power and cost management rather than purely environmental concerns, which is reshaping the energy investment landscape.

6. Reliance on Chinese Imports: South Africa’s clean-energy sector heavily relies on China, sourcing 98% of solar and 95% of battery imports. This presents an opportunity for South Africa to develop its domestic manufacturing capabilities.

Additional Findings:

• Industrial Decarbonization: As emissions regulations tighten, South Africa’s energy-intensive industries face competitiveness challenges that necessitate a shift towards cleaner energy and electrification.

• Strategic Minerals Advantage: South Africa is uniquely positioned as a major supplier of critical minerals but struggles with high energy costs that dilute its competitive edge.

• Electric Vehicle (EV) Market Potential: The EV sector is growing, doubling in sales in 2025, and government incentives aim to bolster local and export EV manufacturing.

• Investment Landscape: South Africa continues to be a leader in sub-Saharan renewable investment at $5.4 billion in 2025, although investment in utility-scale projects has dropped significantly.

The South Africa Transition Factbook 2026 provides a comprehensive analysis of the emerging opportunities and challenges in the country’s energy sector, emphasizing the importance of policy reforms and investments in local manufacturing.

For the complete report, visit BloombergNEF’s Factbook.