The Electricity sector in South Africa is an important part of energy in South Africa. Most power stations in South Africa are owned and operated by the state owned enterprise, Eskom. These plants account for 80% of all the electricity produced in South Africa, and 45% of all electricity produced on the African continent.
South Africa produced around 245,000 GWh of electricity in 2021. Most of this electricity is produced using coal, and is consumed domestically. However, the country's energy sector is undergoing a transformation, and shifting towards the greater use of renewables, and a greater prevalence of independent power producers (IPPs).
In 2022, 12,300 GWh were exported to Eswatini, Botswana, Mozambique, Lesotho, Namibia, Zambia, Zimbabwe and other countries participating in the Southern African Power Pool.
In the same year, South Africa imported 10,800 GWh from the Cahora Bassa Hydroelectric Power Station in Mozambique via the 1,920 MW Cahora Bassa (HDVC) Power Transmission System.
South Africa's Integrated Resource Plan, passed by Parliament in its new form in 2025, aims to transform the country's energy sector, shifting generation away from coal, and towards a combination of renewable and nuclear energy. Representing a combined investment of R2.2 trillion, the IRP is set to add over 105,000 MW of new generation capacity by 2039. The plan was reaffirmed in August 2026, when the Minister of Electricity and Energy attended a conference in China, to pitch the IRP to potential investors.
After the event, the Minister announced that six Chinese companies were going ahead with plans to build factories for transmission infrastructure in Gauteng.
As more independent power producers enter the electricity sector, the share of non-Eskom power generation in South Africa continues to grow. In February 2026, non-Eskom electricity generation (mainly from renewable wind and solar plants) had grown by 20.4% year-over-year. In September 2026, the city of Cape Town was the first in South Africa to sign a power purchase agreement with an independent power producer (IPP), allowing the municipality to source energy outside of Eskom, and at competitive rates. The two solar projects that formed the first phase of the tender process will allow the city to source energy at around 20% lower than Eskom's pricing.
Shifts in the South African energy sector are also being driven by the increased adoption of hybrid and electric passenger vehicles. Sales figures for these vehicles, especially in the preowned market, have increased significantly in recent years. EV charging infrastructure, much of which uses renewable energy, is expanding. Furthermore, a 2026 SANRAL policy formalized public EV charging and battery swapping facilities in the same category as gas stations, and the SA Government's whitepaper position is that all new and upgraded forecourts should include EV chargers.
Electricity production
The national grid
The South African energy grid has around 60,000 MW of capacity, most of which is operated by state-owned Eskom. However, in recent years, the share of non-Eskom power generation has grown significantly, especially under the 2025 Integrated Resource Plan.
Power generation split
As of 2025, South Africa's power generation by type of energy consists of 58% coal, 20% solar, 8% wind, 4.5% diesel, 4% hydro, 2.5% nuclear, and 4% other sources.https://iol.co.za/business-report/companies/2025-10-19-ramokgopa-unveils-r2-2-trillion-off-balance-sheet-energy-investment-plan/
Revenue collection
Electricity is paid for using various methods in South Africa, depending on where the user resides, and their payment preferences. For certain household users, payment goes directly to the municipality, such as is the case in most of the City of Cape Town, while for others, payment goes to Eskom, as the power supplier. Payments that go to the municipality are then paid by that local government to whomever the energy was sourced from, such as Eskom or an independent power producer (IPP), which would set their own pricing for bulk supply.
Electricity costs are determined by tariffs, with rates per kWh varying depending on the type of user (e.g., residential, commercial, and industrial); where the property is located; and the usage for the particular billing period (usually monthly). Municipalities set and publish these tariffs.
Certain properties have automatic billing, receiving an invoice at the end of the month. Over the years, municipalities have shifted towards prepaid electricity setups, where a prepaid meter is installed by the municipality in the user's premises. The user then purchases electricity in whatever quantity they prefer, whenever they want, and enters a token number into the meter to load the electricity. This can be purchased through a variety of methods, including many banking apps and general bill payment apps.
History
Prior to the establishment of Eskom the provision of electricity was dominated by municipalities and private companies. The city of Kimberley was the first user of public electricity in South Africa when it installed electric streetlights run off a coal fired power plant in 1882 to reduce crime at night.
The first central power station and distribution system in South Africa consisting of a 150 kW generator with two boilers and located at Cape Town Harbour was completed in 1891 to supply power to government buildings in the nearby city.
In 1893 the town (now neighborhood) of Wynberg, in Cape Town, opened a power station to provide power to a local tram system and public street lights. This was followed by the first municipal power station built by the City of Cape Town in 1895 with the construction of the Graaff Electric Lighting Works to power 775 street lights.
Not all early power stations were successful, such as the short lived President Street Power Station in Johannesburg. Constructed in 1906, the use of unsuitable fuel in an experimental engine design lead to an explosion in 1907.J Shorten, The Johannesburg Saga, ‘The City Electricity Department,’ page 599 ff.
Between 1908 and 1912, four power stations were erected around Johannesburg to deliver electricity for the nearby mining industry. The power plants were connected to an electrical substation 8km outside of Rosherville by the first transmission lines in South Africa, with a voltage of 80 kV, 40 kV, and 20 kV.G. Klingenberg (1924): Bau grosser Kraftwerke. Zweite Auflage. S. 422ff: VIII. Zweites Ausführungsbeispiel: Die Anlagen der Victoria Falls and Transvaal Power Co. Ltd. in Südafrika (Commons)
Eskom was founded by the Electricity Act of 1922, which allowed for the establishment of a government owned non-profit company to provide electricity. In 1948 Eskom bought out the Victoria Falls and Transvaal Power Company with government support for £14.5 million (roughly equivalent to £2.55 billion in 2017) to become South Africa's primary electricity provider. Eskom dropped its non-profit mandate in the late 1970s and government control over the company was expanded in 1998 with the passing of the Eskom Amendment Act.
Renewables and energy producer diversification
Context
Following the South African government's announcing of the Integrated Resource Plan in 2010 and Renewable Energy Independent Power Producer Procurement Programme in 2011, numerous local companies have started trading platforms for wheeled renewable energy, including EXSA and Ampli Energy, with the aim of more stable pricing and supply, and increased market competition, within the country's energy sector.
As of 2025, South Africa has a total of 23 independent power producer–owned solar power facilities, each contributing more than 75MW of dispatchable power to the grid, with the largest providing 150MW. The country’s independent power producer (IPP) procurement programme aims to add 39GW of capacity to South Africa’s energy mix by 2030.
Plants already in operation have contributed significantly to preventing load-shedding. The Kenhardt hybrid solar and battery energy storage facility, with 540MW capacity, is the country’s largest, followed by Xina Solar One, Karoshoek Solar One, Kathu Solar Park, Kaxu Solar One, and Redstone Solar Thermal Power Plant. All of these plants are located in the Northern Cape province.
According to the Department of Energy's IPP Projects platform, South Africa's 25 largest solar farms contribute around 2,100MW to the national grid.
Solar energy potential
In early 2025, Senatla et al estimated that South Africa's commercial and industrial rooftops alone could generate around 12 gigawatts of solar energy. This includes retail outlets, universities, schools, hospitals, and factories. South Africa has approximately 111 million square meters of commercial and industrial rooftop surface (around 80% of the total) that is suitable for solar, and the country enjoys a very sunny climate, which is ideal for solar power generation.
The same researchers made numerous recommendations in terms of how best to use this potential energy resource. Firstly, they recommended that government regulations should be put in place to mandate the installation of solar power on all suitable new commercial rooftops. Secondly, they recommended that an assessment should be done of existing rooftops' potential to have solar installed.
And thirdly, they recommended that "virtual power plants" are set up, so that prosumers (those who consume and produce energy simultaneously) can sell power to the grid by forming virtual power plant platforms among themselves. The virtual power plant platform aggregates the power produced by these small power plants, and sells it at one price to Eskom, a municipality, or other prosumers. South Africa already has 5 such virtual power plants, but there exists an opportunity to develop a national policy to allow small scale producers to form virtual power plants and sell energy directly to their municipalities.
Progress
In May 2025, Sasol, South Africa’s second largest emitter of greenhouse gases, announced that it intended to run its flagship plant at full capacity, offsetting the use of coal feedstock by sourcing more renewables. Sasol aims to ramp up its Secunda synthetic fuels facility as close to a nameplate capacity of 7.6 million tons a year as possible, while maintaining its target of reducing emissions by 30% by 2030. This is part of a larger plan to decarbonise.
In June 2025, a World Bank-linked climate fund backed South African plans to cut the country's reliance on coal, unlocking up to R47 billion ($2.6 billion) in financing. The approval of an updated plan by the Climate Investment Funds will see the CIF disburse $500 million to the country. That, in turn, clears the path for as much as $2.1 billion in funding from multilateral lenders, including the World Bank and the African Development Bank. The funding is set to play an important role in South Africa’s energy transition.
In the same month, it was reported that German-based JUWI Renewable Energies was building large-scale solar projects for major companies in South Africa. The company signed two solar module supply agreements with JA Solar, and includes around 420,000 solar panels for two large-scale projects, with an energy output totaling 220 MW. These will be used for companies including Glencore, Sasol, and Air Liquide. The plants form part of JUWI's broader R6 billion rollout of new solar PV projects in South Africa.
In late June 2025, in his keynote address at the Africa Green Hydrogen Summit, South African President Cyril Ramaphosa reaffirmed his commitment to expanding the country's green hydrogen production. As of mid-2025, South Africa has invested more than R1.5 billion into its Hydrogen South Africa program.