SA renewables masterplan to drive investment

From the newsletter

The South African Renewable Energy Masterplan (SAREM) has been approved by the cabinet. The plan seeks to capitalise on the rising demand for renewable energy and storage technologies to promote industrialisation and localisation. It prioritises key technologies including solar PV, onshore wind, lithium-ion batteries and vanadium redox flow batteries.

• Renewable energy investments in South Africa have peaked due to the rise in grid challenges and electricity prices, as well as the growing pressure for sustainable products. South Africa leads Africa in installed renewable energy capacity, at 11,129 MW.

• South Africa has implemented several plans in the past that worked to drive investment in renewables. The Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) was one of its major successes. Projects from Bid Windows 1 to 4 injected over $10.6 billion into the local economy.

More details

• At the heart of the plan is a drive to boost local demand for renewable energy and storage technologies. It recognises that a robust domestic market is crucial to justify investment in industrial capacity and to ensure the inclusive development of the sector. To achieve this, it proposes a range of interventions, including the publication of regular updates on public and private procurement pipelines, and addressing cross-cutting issues that hinder demand, such as grid constraints and market infrastructure development.    

• A key pillar of SAREM is driving industrial development within the renewable energy sector. The plan aims to build domestic industrial value chains to capitalise on the growing demand for renewable energy and storage, both locally and internationally.  This involves a range of measures, including setting clear localisation objectives, aligning industrial policy with renewable energy goals, and implementing trade and industrial policy measures to support local manufacturers.   

• The country imports its solar panels mainly from China. In the first two months of 2025, it imported more than 490 MW of solar panels. Last year, it spent over $422 million importing 3,786 MW of panels. This is potentially big if it is to localise sourcing.

• Speaking after the approval, the Minister of Electricity and Energy, Dr Kgosientsho Ramokgopa, said, “Beyond wind, solar and battery storage, future iterations of SAREM will consider the integration of additional renewable energy technologies, including the fast-emerging green hydrogen sector and waste-to-energy solutions.”

• The plan also seeks to promote the entry of new and emerging suppliers, particularly those from previously disadvantaged groups, and to create opportunities for ownership by workers and communities.

• Without skills, all the plans are futile. It seeks to address skills gaps, promote technology upgrading, and support research, development, and innovation. The plan proposes a range of interventions to achieve this, including the development of a digital matchmaking platform to connect industry with education providers, and the establishment of an OEM-led cluster platform to support local manufacturers.

Our take

• The masterplan is touted as the key to establishing South Africa's economy back to its glory days. It will not only solve their energy problems but also boost local employment and the wider economy.

• By developing its own renewables sector, South Africa could save millions in foreign spending, which could then be reinvested in the industry. As a country that has always focused not only on local demand but also on exports, this is an opportunity to enter the growing international market for renewable energy.

• The plan's success will depend on overcoming challenges like China's dominance of the renewables market. It won't be easy starting, given the low cost of Chinese products. But with large-scale production and targeting its existing export markets in Europe, which lately have sought to impose tariffs on Chinese products.