SA Renewable Energy Masterplan Paves the Way for Growth and Investment

Under the guidance of policies like the Integrated Resource Plan (IRP), which was updated in 2023, South Africa is targeting an ambitious 29.5 GW of new energy capacity by 2030.

South Africa’s Cabinet has officially approved the South African Renewable Energy Masterplan (SAREM), setting the stage for significant advancements in the nation’s energy sector. This ambitious blueprint aims to bolster energy security while driving industrial growth by developing renewable energy and battery storage technologies. The plan outlines a comprehensive roadmap to address the country's local capacity challenges, infrastructure gaps, and investment hurdles, creating a clear pathway for investors to engage in South Africa’s growing energy market.

SAREM's approval comes at a critical moment, as South Africa’s electricity demand is expected to double by 2040. This surge in demand presents both a challenge and an opportunity, creating a need for extensive renewable energy capacity to support the nation's economic growth. Through SAREM, South Africa intends to meet this growing demand by scaling up renewable energy sources such as wind, solar, and battery storage technologies, ensuring a sustainable energy future for the country.

The African Energy Week (AEW): Invest in African Energies 2025, scheduled for September 29 to October 3, will play a crucial role in examining the implications of the SAREM on South Africa’s energy landscape. The event will bring together key stakeholders, including African governments, energy policymakers, investors, and energy operators, all united in their mission to advance energy solutions across Africa. As a platform for collaboration, AEW is expected to drive significant investments in the African energy sector, aligning with the broader goal of eliminating energy poverty across the continent.

Renewable Energy Targets and SAREM’s Role

Under the guidance of policies like the Integrated Resource Plan (IRP), which was updated in 2023, South Africa is targeting an ambitious 29.5 GW of new energy capacity by 2030. Of this, a substantial 14.4 GW will come from wind, while 6 GW will be derived from solar energy. These renewable energy sources are central to the country's energy transition strategy, which also includes a target of 6.8 GW of renewable energy in the current procurement round. Additionally, natural gas and coal will contribute 3 GW and 1.5 GW, respectively, to ensure a diversified energy mix.

SAREM focuses on accelerating the growth of the renewable energy sector by leveraging rising demand for sustainable power and storage technologies. The masterplan emphasizes solar, wind, lithium-ion battery, and vanadium-based battery technologies as key drivers of industrial development in South Africa. SAREM’s four primary objectives include:

1. Unlocking System Readiness: Ensuring the local energy system is prepared for large-scale renewable energy integration.

2. Driving Industrial Development: Building value chains for renewable energy and battery storage technologies within South Africa.

3. Fostering Inclusive Development: Promoting transformation in the energy industry to ensure equitable access and opportunities for all South Africans.

4. Building Local Capabilities: Developing local skills and fostering technological innovation to support long-term sustainability.

Expected Impact on the South African Energy Market

The SAREM is expected to fuel the rapid expansion of South Africa’s already growing renewable energy market. According to the African Energy Chamber’s State of African Energy 2025 Outlook, South Africa, along with Egypt, is poised to remain a leader in Africa's power generation landscape in 2025. The continent has more than 500 GW of renewable energy capacity in the concept phase, with South Africa and North Africa representing the bulk of these projects. In addition to renewable energy, South Africa is also leading in nuclear-based power generation, and the SAREM will provide further support to these initiatives.

A key aspect of the SAREM is its focus on fostering partnerships across the renewable energy value chain. This includes the implementation of targeted training programs and addressing regulatory barriers that hinder development. While the masterplan offers significant benefits, the South African Cabinet has called for further work to incentivize investors to fund renewable energy projects. One area receiving particular attention is the development of green hydrogen technology, with the goal of meeting international obligations, including the requirement for 5% blended fuel in aviation and maritime sectors by 2030.

AEW 2025: A Platform for Collaboration and Investment

The upcoming African Energy Week (AEW) 2025 will be a pivotal event for the energy industry, particularly in South Africa. The multi-track program will provide a platform to discuss how policies like the SAREM will influence Africa's energy future. A dedicated Energy Transition stage will explore topics such as energy security, scaling up renewable energy, and driving local value across the continent. Key issues such as strengthening public-private sector collaboration, bridging the electricity gap, and energy efficiency will be examined in the context of South Africa’s energy landscape.

AEW will also feature an Invest in African Energies: Country Spotlight on South Africa. This session will highlight the country’s growing energy potential, focusing on the role of oil and gas projects, utility-scale renewable energy projects, and the implementation of green hydrogen and battery storage solutions. By examining the integration of an energy mix that includes solar, wind, natural gas, and green hydrogen, the spotlight will explore how South Africa can achieve energy diversification and security, while creating attractive opportunities for investors.

Looking Ahead: The Path to Energy Security and Growth

SAREM represents a transformative step in South Africa’s energy sector, positioning the country as a leader in renewable energy on the African continent. As the country navigates the complex challenges of energy demand and infrastructure development, the focus on renewable energy and storage technologies will play a key role in building a sustainable, resilient, and inclusive energy future. The South African government, in collaboration with investors and industry players, is working towards realizing these ambitious goals through strong partnerships and strategic investments in energy projects.

The African Energy Week (AEW) 2025 is set to provide a critical platform for stakeholders to align on the future of Africa’s energy sector. With SAREM at the forefront, South Africa’s renewable energy journey is expected to gain momentum, providing new opportunities for investors, technology providers, and energy developers in the years to come.