Written By: Faith Jemosop
South Africa’s state-owned power utility, Eskom, has announced plans to rely primarily on clean energy sources by 2040. This strategic pivot comes amid worsening power outages, mounting pressure to cut carbon emissions, aging infrastructure, and a growing global shift toward renewable energy. But why is Eskom taking this route now, and what forces are driving this urgent transition?
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Urgent Need to Address Load Shedding and Energy Security
South Africa’s energy crisis is no secret. Eskom has been plagued by frequent load shedding, causing rolling blackouts that disrupt industries, education, healthcare, and everyday life. Much of this crisis stems from an over-reliance on aging coal-fired plants, many of which have become unreliable and expensive to maintain. By shifting to cleaner energy technologies like solar, wind, and battery storage, Eskom aims to create a more stable and resilient grid.
Clean energy sources offer faster deployment timelines and lower operating costs compared to coal plants. Solar PV, for instance, can be deployed within a year, whereas a new coal station takes nearly a decade. Eskom believes that replacing aging coal units with renewable alternatives will significantly reduce downtime and strengthen energy security.
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Climate Commitments and Global Pressure to Decarbonize
Another driving force behind Eskom’s clean energy ambition is South Africa’s international climate commitments. As a signatory to the Paris Agreement, South Africa has pledged to reduce its greenhouse gas emissions and achieve net-zero carbon emissions by 2050. Eskom, which generates over 80% of the country’s electricity from coal, is responsible for a significant share of national emissions.
Transitioning to clean energy is therefore not just a local decision, it’s a global obligation. With increasing scrutiny from trade partners like the European Union (which is enforcing the Carbon Border Adjustment Mechanism), South Africa risks export penalties if it doesn’t decarbonize its grid. Eskom’s 2040 goal to shift primarily to clean energy is a strategic response to avoid economic isolation and environmental condemnation.
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Unlocking International Finance through the Just Energy Transition Plan
One of the most compelling reasons for Eskom’s clean energy shift is access to concessional international finance. In 2021, South Africa secured an $8.5 billion Just Energy Transition Partnership (JETP) deal with wealthy nations like the US, UK, France, Germany, and the EU. That amount has since grown to nearly $12.9 billion. A core condition of accessing this funding is a commitment to decarbonize Eskom’s energy generation.
Eskom plans to use these funds to repurpose old coal stations, invest in battery energy storage, and develop new solar and wind projects. The Komati Power Station, which was decommissioned in 2022, is the first JETP-backed project being repowered with 220 MW of clean energy and 150 MW of storage. This not only brings in investment but also creates a global model for clean energy transitions in emerging economies.
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Economic Efficiency and Cost Competitiveness of Renewables
Clean energy isn’t just about the environment , it’s also about economic logic. The costs of solar and wind energy have plummeted by over 80% in the last decade. In South Africa, utility-scale solar and wind projects are now cheaper than new coal or nuclear plants.
Eskom, heavily burdened by R400 billion (~US$22 billion) in debt, sees renewable energy as a way to reduce its long-term financial load. With limited access to new borrowing under its Treasury-approved debt relief plan, the utility must pursue capital-light partnerships, especially through its upcoming renewable energy subsidiary. Renewables offer scalable, modular, and cost-effective solutions that are essential for Eskom’s survival and reform.
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Opportunity for Job Creation and a Just Transition
A clean energy transition also offers an opportunity for massive job creation, a critical consideration in a country battling high unemployment. Eskom has partnered with organizations like SARETEC (South African Renewable Energy Technology Centre) to retrain coal sector workers for roles in solar installation, wind maintenance, and battery storage management.
With coal towns like Komati and Kendal facing plant decommissioning, Eskom is working to ensure a just transition that provides new livelihoods rather than economic abandonment. Retraining programs, education investments, and local renewables projects will help minimize social resistance and ensure that the transition uplifts communities rather than harming them.
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Responding to Market Liberalization and Private Sector Growth
The liberalization of South Africa’s energy market has unleashed a wave of private sector investment in renewables. Since the government removed licensing thresholds in 2022, over 4.4 GW of private solar capacity has been installed, up from less than 1 GW two years prior. Corporates, mines, and municipalities are building their own solar plants to avoid Eskom’s load shedding.
If Eskom fails to modernize, it risks becoming irrelevant in a future where clean, decentralized, and privately generated electricity dominates. By embracing clean energy, Eskom can remain competitive, offer new services, and collaborate with private developers instead of losing customers.
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Technical Benefits of Decentralized Renewable Energy
Clean energy is not just cost-effective, it’s technically smart. South Africa’s solar and wind resources are among the best in the world, especially in the Northern Cape, Eastern Cape, and Western Cape. By placing generation closer to demand or integrating distributed energy systems, Eskom can relieve pressure on transmission infrastructure and reduce technical losses.
Also read: Eskom’s 2040 Clean Energy Vision
While Eskom will need to invest billions in grid upgrades, decentralized renewables provide a flexible way to reduce the load on the main grid. Hybrid systems with solar, wind, and storage can power rural communities, industrial zones, and mines, all while improving energy access and climate resilience.
Replacing Aging Infrastructure with Future-Proof Technology
Many of Eskom’s coal plants are nearing the end of their operational life, with some built in the 1960s and 70s. The cost of maintaining and retrofitting these plants often outweighs the benefits. Instead of throwing more money into old technologies, Eskom is choosing to leapfrog into clean energy systems that are modular, scalable, and aligned with global trends.
Moreover, newer clean energy plants are digitally optimized, allowing for predictive maintenance, remote monitoring, and greater operational efficiency. These are advantages that coal plants, with their complex fuel supply chains and emissions control systems, cannot match.
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Aligning with South Africa’s Integrated Resource Plan (IRP)
Eskom’s transition is also in line with South Africa’s Integrated Resource Plan (IRP 2019), which outlines the country’s energy mix through 2030. The plan prioritizes renewables, gas, and battery storage, while scaling down reliance on coal and nuclear. Eskom’s 2040 clean energy target goes even further, setting a long-term vision that aligns with national development goals.
This alignment with policy allows for regulatory support, land use authorizations, and improved access to donor and multilateral funding. By working with government departments and regulators, Eskom ensures that its clean energy shift is not just a corporate ambition but a national strategy.
