By LINDIWE TSOBO
Despite progress in SA’s renewable energy sector and recent government efforts, analysts have emphasised the need for better execution and policy reforms.
SA’s energy sector faces many challenges, in particular grid access and transmission infrastructure. Inadequate transmission capacity remains a pressing issue for renewable energy integration. The country’s ageing grid has struggled to accommodate new projects, especially in regions best suited for solar and wind generation.
Electricity & energy minister Kgosientsho Ramokgopa last week announced the Independent Transmission Programme (ITP), an initiative to modernise and expand the country’s strained transmission network, which includes allowing private companies to invest in and build transmission lines.
The ITP’s pilot phase will result in 1,164km of transmission lines being constructed, adding at least 3,000MW of power to the grid. The National Transmission Company of SA will buy the new infrastructure, while the ministry of electricity & energy will oversee procurement.
Ramokgopa’s announcement follows nance minister Enoch Godongwana’s allocation of R219.2bn for energy infrastructure over the medium term in his 2025 budget to modernise and expand the grid.
Avesh Padayachee, CEO of Fibon Energy, a Midrand-based energy company, stressed the importance of efcient execution. “If funds are well spent, renewable developers can scale projects faster, reducing energy curtailment and enhancing electricity distribution across regions.
“Investing in grid modernisation is essential for integrating additional renewable sources into the national electricity system. However, concerns remain about the country’s ability to bridge the gap between ambition and execution,” he said.
While SA has made progress in renewable energy development through programmes such as the Renewable Energy Independent Power Producer Procurement Programme, analysts warn SA is unlikely to meet its 2030 targets.
Roxanna Naidoo, head of global strategy at a Sandton-based advisory rm Latita Africa, said delays in project approvals and procurement processes are barriers.
The delays can stem from various factors, such as regulatory bottlenecks, capacity constraints, grid access issues, and environmental and social impact assessments.
“Capacity constraints in key departments may hinder the timely completion of renewable energy projects,” Naidoo said.
Naidoo said Godongwana’s proposed 100 basis point increase in VAT over the next two scal years would raise overall project costs for renewable producers, potentially affecting bid competitiveness.
Looking at challenges at the municipal level, analysts at law rm Webber Wentzel emphasised the importance of addressing nancia instability as municipalities play a central role in distributing electricity.
“Many SA municipalities are not nancially bankable, limiting their ability to secure nancing for energy infrastructure projects,” they said.
“To overcome these challenges, the government must prioritise grid modernisation and provide a supportive policy framework for renewable energy development.
“This includes streamlining regulations, providing clear guidelines and implementing policy measures to foster a more stable investment
environment,” they said.