South Africa’s energy industry is in a state of revolution, partly brought about as a result of a decade’s worth of loadshedding and tariff hikes and partly because of the growing need to reduce the country’s reliance on a fossil-fuel-based energy supply.
Although the industry is in a constant state of flux, here are some of the key trends that will dominate the local energy landscape in 2025.
More Flexible Energy Trading
There has been a massive increase in energy trading in general over the past few years. This has been a direct result of the instability of Eskom’s grid, which has meant that customers have needed to find alternative sources of power.
However, given the turbulence of the South African economy and the uncertainty of the energy landscape, many companies are now shying away from long-term power purchase agreements (PPA’s) and are instead opting for more flexible, shorter-term arrangements.
Part of the reason for this is that the rapid growth of renewable energy technologies, the falling costs of solar, wind and battery storage, coupled with the dynamic regulatory environment, have all meant that long-term deals could quickly become outdated or less competitive.
Short-term PPA’s give companies the opportunity to pivot to newer, more cost-effective solutions as they emerge.
Increased Energy Efficiency Efforts
To keep electricity costs as low as possible, smart companies across the country are investing more than ever in energy efficiency initiatives. This might involve upgrading or refurbishing equipment to be more energy efficient, cutting out or refining processes that are energy intensive, or conducting energy audits to make sure their consumption is not wasteful.
Although this drive towards improved energy efficiency has been a trend for years, Eskom’s newly approved electricity tariff hikes, which kick in on April 1st, have given many late adopters a reason to finally get with the program.
Although the National Energy Regulator of South Africa only approved a 12.7% increase, Eskom had requested almost three times that — as much as 36%!
Greater Investment in Private Generation Capacity
Since the electricity crisis in South Africa started over a decade ago, electricity prices have increased by more than 450%. This is directly inverse to the reliability of electricity supply, which has drastically decreased in the same period.
As a result, there has been a huge wave of investment into privately owned and operated renewable energy installations, ranging from rooftop solar systems for private households to massive solar and wind farms that run mines, factories, steel mills and much more.
Even government-owned entities have resorted to investing in their own renewable energy supply, such as state-run hospitals, schools and offices.
Energy Management Solutions is at the forefront of the energy revolution, helping businesses reduce their energy costs through energy audits, power factoring and more. Contact us today to get help minimising your electricity consumption!