South Africa: Breaking Free from Coal Dependence, Embarking on the Energy Transition
10 min read
Over the years, South Africa has established itself as one of Africa's leading economic powers, innovating in digital services. But for more than a decade, it has been experiencing a deep energy crisis: its system, largely based on , is on its last legs. Modernizing it would require heavy investment and risk social unrest. Doing nothing threatens South Africa's industry, growth, and households.
© MUJAHID SAFODIEN / AFP - South Africa is the continent's leading economy, but it relies on coal for more than 90% of its electricity output.
An Industrialized Country Weakened by an Electricity System in Crisis
South Africa remains one of the most industrialized countries on the continent:
- 88% of its population has access to electricity;
- it accounts for nearly 30% of Africa's energy consumption, despite representing only 4.6% of the continent's population (55.4 million inhabitants);
- it has the most developed car fleet in Africa (178 cars per 1,000 inhabitants, compared to an average of 50);
- the country has become a major hub for fintech—startups that are modernizing banking services through digital technology—with more than 500 innovative companies contributing to Africa's booming digital economy.
An Outdated Power Fleet and Massive Dependence on Coal
Two weaknesses explain the current energy crisis:
- Due to insufficient investment, its power generation facilities are outdated. Its networks are constantly on the verge of saturation. Faced with rapidly growing demand, the state-owned electricity company Eskom is forced to carry out numerous operations. In 2023, the country experienced power shortages on 335 days out of 365, with power cuts lasting up to 10 hours a day. Beyond the problems this causes for citizens, especially the poorest, this situation seriously hampers industrial activity, costing the country 1 percentage point of annual growth.
Like China and India, South Africa depends on a single dominant energy source, coal, which in 2024 provided 86% of its electricity production. The country is the world's seventh largest producer, holds 95% of Africa's reserves, and is the world's seventh largest emitter of .
This dependence makes coal an economic, social, and political issue.
A Political Dilemma: Energy Security vs. Low-Carbon Transition
The South African government must therefore reconcile two imperatives: on the one hand, ensuring short-term energy security, and on the other, committing to and reducing emissions in the long term.
The 2023-2027 plan aims for a gradual transition, incorporating a crucial social component: hundreds of thousands of jobs still depend on coal mining. A “fair” transition is essential to avoid further social tensions.
Diversifying Energy Sources: A Geopolitical and Technical Challenge
Diversifying energy sources is not easy for South Africa. It produces virtually no oil or gas. During the apartheid era, the authorities produced fuel from coal (using the ) to circumvent the embargoes imposed on the country by the international community.
The situation could change if the reserves, which American studies consider to be very extensive, are confirmed and if the country decides to exploit them. At the end of 2025, the government decided to end a 13-year freeze on shale gas, paving the way for exploration in the Karoo Basin. As in other countries, a debate has begun on the dangers of for water resources in a region that is semi-arid.
Renewable Energy: Still Modest Development
The country has only recently begun investing in . Virtually non-existent in 2015, installed wind and solar energy capacity will reach 3,400 MW and 6,700 MW respectively by 2024. The government has set a target of doubling capacity by 2039. These are modest figures. By way of comparison, in the most advanced countries, installed solar and wind capacity exceeded 20,000 MW in each sector in 2024.
Other Avenues: Hydroelectricity and Nuclear Power
South Africa has attempted to spearhead the colossal (40,000 MW) Grand Inga hydroelectric complex project in the Democratic Republic of Congo. Its output could be exported to many countries in Africa, both north and south. But negotiations surrounding the project have encountered numerous difficulties, particularly regarding the exorbitant $80 billion price tag. The Grand Inga project has not yet started.
South Africa already operates the continent's only nuclear power plant, at Koeberg, near Cape Town. Its two reactors, built in the 1980s (in cooperation with France), provide 5% of the country's electricity. At the end of 2025, the government decided to revive nuclear power by planning for an additional 5,200 MW. A new nuclear power plant is already planned in Duynefontein, near Cape Town. The country also plans to develop small modular reactors (SMRs).
The Just Energy Transition Partnership (JETP): Unprecedented International Support
In 2021, South Africa became the first country in the world to sign the Just Energy Transition Partnership (JETP), announced at COP26. This initiative, led by a group of international partners (European Union, France, Germany, the United Kingdom, the United States), mobilizes $9.3 billion in concessional loans, grants, and private investment.
The JETP is not limited to financing infrastructure: it aims to co-construct a just transition, integrating social issues, worker retraining, and local economic development.
It recognizes that African countries must move forward “at their own pace” and that the transition must be compatible with their development needs.
The South African model is already inspiring other partnerships, such as the one signed by Senegal in 2023.
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