SA’s R1 trillion energy bet: Why CFOs can’t wait until 2030
By Staff Writer
South Africa’s energy system stands at a crossroads – but the decision window is narrowing. While the country remains one of the world’s top coal users, with over 80% of electricity still generated from coal-fired plants, three forces are converging: rising carbon taxes from 2026, R1 trillion in Just Energy Transition financing, and grid infrastructure that can’t keep pace with renewable demand.
The question for business leaders is no longer whether to transition, but how quickly to move before carbon costs escalate and first-mover advantages disappear.
The current carbon profile
Electricity is South Africa’s single largest source of energy-related emissions, producing 58% of the country’s CO2. For businesses, this translates into direct exposure: at the current carbon tax rate of R190 per tonne (rising from 2026), a company fleet of 100 conventional vehicles generates roughly R87,400 in annual carbon liability. Electric vehicles could cut that exposure in half.
The catch is infrastructure. Charging an EV on a standard outlet can take 10 hours for just 50 miles or 80 kilometres of range. A level 2 charger, requiring a 240-volt upgrade, shortens charge time to an hour for 30-40 kilometres of travel. For companies considering EV fleets, installation planning is as important as the purchase itself.
Progress and bottlenecks
Energy experts suggest that South Africa’s policy environment has improved, but execution lags. The Electricity Regulation Amendment Act of 2024 has set the legal foundation to establish a competitive power market and welcome an independent system operator.
According to Zaeem Soofie, the Head of Energy and ESG at Fairbridges Wertheim Becker, “Poor execution, if anything, is a greater risk. First, in respect of grid
capacity and access. The pipeline of generation (mainly renewables) is strong, but
transmission remains the bottleneck. Eskom/NTCSA’s latest public plan calls for ~14,500 km
of new lines and 210 transformers in the 2024–2033 window, with around R112 billion over
the first five years – a scale-up that is underway but still catching up with demand.”
For business leaders, Soofie’s warning is strategic: renewable capacity is available, but grid access isn’t guaranteed. Companies banking on power purchase agreements or wheeling arrangements should pressure-test their timelines against NTCSA’s infrastructure rollout schedule.
Without this backbone, renewables cannot scale fast enough to replace coal and meet the rising demand.
Opportunities in the Just Energy Transition
South Africa’s Just Energy Transition Investment Plan (JET-IP) targets more than R1 trillion in financing by 2027, supported by international pledges of $13.8 billion, which translates into opportunities. Businesses may benefit from build-out, coal site repurposing and localisation of supply chains.
Energy experts also note that transition finance works best when paired with people-first planning that reskills workers, supports small businesses and ensures tax bases in mining towns do not collapse. Done right, these measures align decarbonisation with economic growth.
Corporate strategy and carbon pricing
The carbon tax, set at R190 per tonne of CO2 emissions in 2024, will steepen from 2026. This pricing mechanism gives companies a financial incentive to switch to renewables and efficiency measures. CFOs can now frame decarbonisation as an internal rate of return instead of a compliance cost. The strategic question executives must ask is how quickly to embed low-carbon operations before costs climb.
The road to 2030
South Africa’s challenge is synchronising three moving parts with the expanding grid, securing capital and building social trust to evolve the energy network. Coal will not disappear overnight, but a managed decline is already underway. Renewable capacity is rising, supported by private-sector procurement and household solar installation. EV adoption remains slow, but is expected to accelerate as charging infrastructure expands and fleet owners respond to tightening emission rules.
This decade offers companies risk and opportunity. Aligning with the Just Energy Transition unlocks financing, improves investor confidence and positions firms competitively in an increasingly carbon-conscious global market.
Transitioning to a renewable future
The energy transition hinges on delicate political, climate, finance and governance balances. These forces shape how, where and when companies invest in decarbonisation and renewable infrastructure. For executives, navigating this complexity with foresight will define industry competitiveness, resilience and alignment with a low-carbon economy by 2030.
