South Africa’s power market is shifting from a coal-dominated, state-led system toward a more competitive model in which private developers build renewable projects for corporate buyers, municipalities, and to supply the grid, alongside growing bilateral trading and electricity wheeling. Against this backdrop, renewable technologies are expected to overtake thermal generation in the country’s capacity mix by 2035, as solar PV and wind replace retiring coal capacity, according to GlobalData, a leading intelligence and productivity platform.

GlobalData’s latest report, “South Africa Power Market Trends and Analysis by Capacity, Generation, Transmission, Distribution, Regulations, Key Players and Forecast to 2035,” reveals that the country’s installed power capacity is projected to grow at a compound annual growth rate (CAGR) of 3.5% between 2025 and 2035.

Attaurrahman Ojindaram Saibasan, Power Analyst at GlobalData, comments: “South Africa’s transition is no longer defined solely by public procurement. The removal of generation licensing thresholds has enabled mines, manufacturers, retailers, and other large consumers to secure power directly from independent producers. This is expanding the role of corporate power purchase agreements and wheeling, while creating a more diverse market alongside Eskom’s legacy generation fleet.”

Coal will remain an important source of electricity during the transition because of its established role in the generation mix and the need for dispatchable supply. However, the planned retirement of older coal plants is increasing the need for replacement capacity, flexible resources, and reliable transmission connections. Renewable capacity will expand faster than renewable generation, reflecting the differing operating profiles of solar and wind relative to those of coal-fired power stations.

Saibasan adds: “The central constraint is increasingly the grid, rather than the availability of projects or investor interest. South Africa has a substantial renewable project pipeline, particularly in high-resource provinces, but transmission capacity in key wind and solar corridors is already heavily allocated. The delivery of new transmission infrastructure will determine how rapidly contracted and privately developed projects can reach commercial operation.”

The Electricity Regulation Amendment Act, which took effect in 2025, provides the framework for a competitive wholesale electricity market. In parallel, Eskom’s unbundling, the establishment of the National Transmission Company South Africa, and the development of independent transmission projects are intended to strengthen market governance and mobilize investment in network expansion. Private electricity trading is also developing through bilateral contracts and licensed traders ahead of the full market transition.

Investment is expected to concentrate on solar PV, onshore wind, battery storage, and transmission infrastructure over the remainder of the decade. The market’s success will depend on aligning renewable procurement, grid delivery, municipal financial reform, and the operational recovery of Eskom’s existing fleet.

Saibasan concludes: “South Africa has moved beyond the question of whether private capital will participate in its power sector. The key issue is whether market reform and transmission expansion can proceed quickly enough to replace retiring coal capacity, improve supply reliability, and connect renewable projects where resource quality is strongest.”

About GlobalData

GlobalData Plc (LSE:DATA) operates an intelligence platform that empowers leaders to act decisively in a world of complexity and change.​ By uniting proprietary data, human expertise, and purpose-built AI into a single, connected platform, we help organizations see what’s coming, move faster, and lead with confidence.​​ Our solutions are used by over 5,000 organizations across the world’s largest industries, delivering tailored intelligence that supports strategic planning, innovation, risk management, and sustainable growth.

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