South Africa Energy Production Trends

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How The Energy System Is Structured

The South Africa Department of Energy (DOE) and the National Energy Regulator (NERSA) are the two leading agencies that help frame and implement government energy policy.

The Department of Energy (DoE) is mandated to ensure the secure and sustainable provision of energy for socioeconomic development. The Department produces an integrated energy plan, regulates the energy industries, and promotes investment in accordance with the integrated resource plan. The Department’s strategic goals are to:

  • ensure that energy supply is secure and demand is well managed;
  • facilitate an efficient, competitive, and responsive energy infrastructure network;
  • ensure that there is improved energy regulation and competition;
  • ensure that there is an efficient and diverse energy mix for universal access within a transformed energy sector;
  • ensure that environmental assets and natural resources are protected and continually enhanced by cleaner energy technologies;
  • implement policies that adapt to and mitigate the effects of climate change; and
  • implement good corporate governance for effective and efficient service delivery.

The DoE places emphasis on broadening electricity supply technologies to include gas and imports, as well as nuclear, biomass and renewable energy resources (wind, solar, and hydro), to meet the country’s future electricity needs and reduce its carbon dioxide emissions.

Goals beyond 2020 include contracting more than 20,000 megawatts (MW) of renewable energy, including an increasing share from regional hydro-electricity.

The National Energy Regulator (NERSA) is mandated to regulate the electricity, piped-gas, and petroleum pipeline industries. NERSA’s responsibilities include:

  • issuing licences and setting pertinent conditions;
  • setting and/or approving tariffs and prices;
  • monitoring and enforcing compliance with licence conditions;
  • dispute resolution such as mediation, arbitration, and the handling of complaints;
  • gathering, storing, and disseminating industry information;
  • setting rules, guidelines, and codes for the regulation of the three industries;
  • determination of conditions of supply and applicable standards; and
  • the registration of import and production activities.

The National Strategic Fuels Stock Policy sets the framework for the storage of fuel stock by the government and by industry. It aims to ensure an uninterrupted supply of petroleum products throughout South Africa by providing adequate strategic stocks and infrastructure, such as storage facilities and pipeline capacity. Strategic stocks are to be used during declared emergencies. The Minister of Energy has the power to decide when a shortage of fuel and oil warrants an emergency.

The National Development Plan (NDP) envisages that by 2030, South Africa will have an adequate enough supply of electricity and liquid fuels to ensure that economic activity and welfare are not disrupted and that at least 95% of the population will have access to grid or off-grid electricity.

The plan proposes that gas and other renewable resources like wind, solar, and hydro-electricity will be viable alternatives to coal and will supply at least 20,000 MW of the additional 29,000 MW of electricity needed by 2030.

Other recommendations in the plan include diversifying power sources and ownership in the electricity sector, supporting cleaner coal technologies, and investing in human and physical capital in the 12 largest electricity distributors.

Sources of Energy

With abundant coal supplies, South Africa meets around 74% of its energy needs through coal. While it is largely used to generate electricity, a significant amount is channelled to synthetic fuel and petrochemical operations. Around 28% of coal production is exported.

South Africa supplies two-thirds of Africa’s electricity and is one of the four cheapest electricity producers in the world. Almost 90% of South Africa’s electricity is generated in coal-fired power stations. Koeberg, a large nuclear station near Cape Town, provides about 5% of capacity. A further 5% is provided by hydroelectric and pumped storage schemes. In South Africa there are few, if any, new economic hydro sites that could be developed to deliver significant amounts of power.

According to Natural resource accounts: Energy accounts for South Africa, 1995-2001, the total primary energy supply for year 2000 was 74.8% coal; 3.2% nuclear; 1.3% gas; 9.0% oil; 0.1% hydro; and 11.6% renewables. In 2010, according to the U.S Energy Information Administration, coal was 67%; nuclear 2%; gas 2%; oil 19%; hydro less than 1%; and renewable 10%. However, the most recent data (2012) places coal at 69%; nuclear 2.4 %; gas 2.9%; hydro 0.1%; and renewable energy 11%.


Profiles of Leading Energy Companies

ESKOM: Almost 90% of South Africa’s electricity is generated within coal-fired power stations. Generation is dominated by Eskom, the national, wholly state-owned utility which supplies approximately 95% of the country’s electricity. Eskom produces electricity from a variety of sources, including coal, hydro, nuclear, solar, wave, wind power, and pumped storage. Coal dominates the energy supply, covering approximately 77% of the country’s energy needs. The utility generates, transmits, and distributes electricity to industrial, mining, commercial, agricultural, and residential customers and redistributors. According to the 2011 report The Eskom Factor, municipalities and industry dominate Eskom’s sales to customers.


The organizational structure is currently in the process of being revised to incorporate recent appointments and changes. Its generation division maintains a varied portfolio of plants, open cycle gas turbines, hydroelectric, pumped storage, wind, and nuclear units, along with coal-fired plants. Below is its current generation division portfolio.


As 93% of Eskom’s electricity is generated from coal-fired stations, it has a large environmental footprint, with its most topical being its carbon footprint. In 2011, the utility’s CO2 emissions were 230.3Mt, an increase of 2.5% on the previous year’s 224.7Mt. However, Eskom is committed to reducing its footprint by 2030. Despite a potential peak of 283Mt in 2022, it is working towards a reduction to 235Mt by 2030.

Eskom will contribute to this reduction through a comprehensive six step approach that includes supply measures and demand-side interventions.

Eskom’s climate change commitment, the six-point plan, which came out of the 17th United Nations Conference on Climate Change, Durban, South Africa, in 2011:

1. Diversification of the generation mix to lower-carbon-emitting technologies: Eskom states that although the tons of CO2 they emit will increase in the short- to medium-term, they are committed to assessing options to slow the rate of increase, and ultimately to begin decreasing it by reducing the coal energy mix they use (Eskom News Journey: COP17-CMP7, 2011). According to Eskom, their goal is to reduce coal from 88% to 70% by 2025 by increasing nuclear gas, renewables, and hydro components in the energy mix. Plans include increasing the nuclear component by up to 20,000 MW by 2025, and an increase in the renewable component to at least 1,600 MW by 2025.

2. Energy efficiency measures to reduce demand and greenhouse gas and other emissions: Eskom has established an internal energy efficiency program, which seeks to save a billion kilowatt-hours and includes working with consumers to reduce their demand. The short-term target is to save 3,000MW over the next six years and 8,000 by 2025, which equates to about two six-pack coal-fired power stations.

3. Adaptation to negative impacts of climate change: Short-term adaptation measures include the consideration of dry-cooling at power stations, reducing water consumption by approximately 90%. Medium- to long-term considerations include improving the resilience of infrastructure and staff by incorporating adaptation issues into long-term planning and risk mitigation strategies.

4. Innovation through research, demonstration, and development: At present, Eskom has a number of pilot projects which include an underground coal gasification, a System Johansson Gasifier biomass pilot for small-scale applications, the pebble-bed modular reactor, and a 100MW solar thermal plant (Eskom COP 17, 2011).

5. Investment through carbon market mechanism: Eskom participates in and supports the Clean Development Mechanism (CDM), using a shadow price for carbon to evaluate all investment decisions and to level the playing field across a variety of technologies.

6. Progress through advocacy, partnerships, and collaboration: Eskom is an active member of the National Committee on Climate Change and also participates in the Long-term Mitigation Scenario process.

Renewable Energy Utilities: Biotherm Energy & Solar Capital

According to the 2014 Climatescope Report, South Africa has the 3rd most attractive renewable energy market in the developing world. BioTherm Energy is Africa’s leading Independent Power Producer (IPP) under the First Round of the South African Renewable Energy Independent Power Producers Programme (REIPPP). Solar Capital (a subsidiary of the Phelan Energy Group) won an award in 2013 for the best renewable energy company in Africa.

Biotherm Energy: The African-born utility focuses on wind and solar project development, and currently has four operational projects: (1) Aries Solar PV project; (2) the Konkoosies Solar PV project; (3) the PetroSA Biogas Project; and (4) the Klipheuwel wind project.

Solar Capital: The subsidiary delivers efficient, renewable solar energy projects. Currently, it has two operational projects customered by Eskom: De Aar project 1 and De Aar 3 project 2. Its pipeline projects within the country are Aggenys, Ritchie, Loreisfontein, and De Aar 2.

Submitted by Climate Scorecard Country Manager Monique Classen


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