Five Key SA Shifts Unleashing Southern Africa's Energy Potential
A New Era for South Africa’s Energy Sector
For over a decade, South Africa’s energy sector was mired in crisis, with frequent power outages and an unreliable grid. However, 2025 marked a turning point, as the industry transitioned from crisis management to forward-looking strategies. While challenges remain, the shift has been significant, signaling a long-awaited transformation.
Here are five major developments that defined the energy landscape in 2025.
Power Move 1: Introduction of the Wholesale Energy Market
One of the most notable changes this year was the push towards a wholesale energy market. The South African Wholesale Energy Market (SAWEM), set to launch in 2026, represents a shift from the previous single-buyer system, where Eskom controlled all aspects of electricity distribution. With SAWEM, the market will become more competitive and open, allowing multiple private players to trade and wheel power freely.
The National Energy Regulator of South Africa (NERSA) recently approved the first market operator license, a critical step toward the launch of SAWEM. This development is expected to create a dynamic environment where generators can sell to multiple customers, and traders can compete on price and flexibility. This shift could lead to increased private investment, greater competition, and lower prices, offering businesses more choices in their energy mix.
Power Move 2: Surge in Electricity Trading Licences
The demand for electricity trading licenses saw a dramatic increase in 2025, marking a significant milestone for the energy sector. While regulations were still being developed, the rush to secure these licenses highlighted the growing appetite for alternative energy solutions among commercial and industrial (C&I) users.
This surge indicates a strong desire to move away from reliance on the national grid. As the regulatory framework becomes clearer, it is anticipated that market participation will continue to grow rapidly.
Power Move 3: One-to-Many Generation Model
Traditionally, independent power producers (IPPs) operated under a “one-to-one” model, signing agreements with individual customers. However, 2025 brought a major breakthrough with the introduction of the “one-to-many” generation model.
A solar farm in the Free State successfully demonstrated this approach, enabling the delivery of energy to multiple corporate customers simultaneously. This model showcases the potential for large-scale private generation to serve a broad range of consumers through shared assets.
SolarAfrica’s SunCentral project, with a capacity of 1GW, is another example of this trend, set to come online in early 2026. More projects like this are expected to follow, further expanding the possibilities for renewable energy distribution.
Power Move 4: Private Capital in Transmission Infrastructure
Another key development in 2025 was the government’s decision to allow private sector involvement in transmission infrastructure. This includes third-party funded transmission lines, private grid expansion under Eskom oversight, and cost-sharing models between IPPs and the state-owned entity.
This initiative allows private capital to co-fund and co-develop parts of South Africa’s transmission network, helping to alleviate bottlenecks caused by Eskom’s grid constraints. By expanding capacity, this move supports the growth of renewable energy and enhances the overall efficiency of the energy sector.
Power Move 5: Corporate Sector Embraces Renewables
The corporate sector’s commitment to renewables reached new heights in 2025. Heavy energy users across various industries, including mining, automotive, manufacturing, and agriculture, signed some of the largest renewable power purchase agreements (PPAs) in the country’s history.
Driven by sustainability goals such as the Carbon Border Adjustment Mechanism (CBAM) and affordability concerns, companies are increasingly turning to renewable energy sources. This shift has accelerated demand for flexible wheeling solutions, which SolarAfrica has seen firsthand in its operations.
With 2025 marking the beginning of a new chapter, 2026 promises even greater momentum. The energy sector is poised for rapid growth, driven by innovation, investment, and a collective commitment to sustainable practices.
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