Modernising South Africa’s power landscape

South Africa is facing significant challenges in modernising its power landscape to meet future energy demands, with concerns about the impact of load shedding and the transition to renewable energy sources. Robert Futter, Executive Director at Cresco Group, highlighted these issues in a recent interview with CNBC Africa. Futter expressed caution about the current state of the energy sector, noting that while there have been improvements in the performance of old power stations, there is still a shortage of supply. Many large energy users are experiencing load curtailment, which is being used as a buffer against potential load shedding issues. However, as coal plants are decommissioned and older power stations continue to deteriorate, the grid is facing challenges in balancing supply and demand. The introduction of large renewables, while a positive step, poses additional complexities as renewable energy sources are not baseload and do not consistently generate power. This mismatch between supply and demand is expected to persist until new technologies are implemented to help balance the grid. Futter compared South Africa's situation to that of Australia, highlighting the need for innovative solutions to address the energy challenges the country is facing. The delay in onboarding green energy solutions, such as gas generation and green hydrogen, further complicates the energy transition. While these technologies are essential for supporting the grid and reducing dependence on traditional fossil fuels, their scalability and adoption timelines remain uncertain. Futter emphasized the importance of balancing existing options while waiting for new technologies to mature, to ensure a smooth transition to a more sustainable energy mix. The energy landscape in Africa, particularly in South Africa, presents significant investment opportunities, with the liberalization of the energy sector driving private sector participation. Futter noted that South Africa dwarfs other African countries in terms of energy transactions and megawatt capacity, making it an attractive market for investors. The potential for further liberalization and the establishment of energy trading platforms are expected to enhance market dynamics and facilitate cross-border energy trade. Futter highlighted the Southern African Power Pool as a key platform for energy exchange, emphasizing the need for regulatory alignment and tariff consistency to enable effective energy wheeling and interconnection across the region. While challenges persist in harmonizing regulatory frameworks, there is optimistic momentum towards increased collaboration and coordination in advancing energy trade and infrastructure development in Africa. Overall, the energy landscape in South Africa and beyond presents a mix of challenges and opportunities that require innovative solutions and strategic investments to meet the growing energy demands of the continent.