Balancing the grid, key insights from Cresco and Standard Bank CIB energy report
The 2025 Energy Market Projections report from Cresco and Standard Bank Corporate and Investment Banking (CIB) reveals that South Africa’s energy transition is at a pivotal moment.
Building on the July 2024 edition, this annual update incorporates major changes arising from November’s draft Integrated Resource Plan (IRP2024), remodelled by SANEDI using a multi-nodal approach.
The analysis underscores one clear message: while reoccurring loadshedding may have ended in March 2024, the real challenge lies ahead, bringing new capacity online quickly, including renewables, gas and storage, with little room for delays.
“Securing supply while enabling economic growth is not a trade-off; it's a necessity,” explains Head of Power at Standard Bank CIB Rentia van Tonder. “Investors and policymakers must act quickly and decisively if we're to preserve both energy stability and climate credibility.”
Coal, a temporary lifeline
The IRP2024’s most significant shift is cabinet’s decision to extend the life of Camden, Grootvlei and Hendrina power stations until 2030. While this buys time for the grid, it also puts pressure on meeting climate targets. By 2040, coal’s share will drop to 25%, with only 5 Eskom plants still in operation.
“The coal extension buys us time, but it also raises the bar for everything else,” says van Tonder. “Ensuring flexibility to support growth will remain important.”
Gas: Critical but still uncertain
Gas remains a central pillar of the energy mix, with IRP2024 targeting 6GW of new capacity by 2030 and 10GW by 2040, yet Cresco questions whether this can be achieved given policy bottlenecks and infrastructure gaps.
While gas can bridge peak-hour shortfalls, its reliability depends on investment in pipelines, regasification facilities and clearer regulations.
Renewables and storage: From ambition to necessity
By 2030, wind and solar are projected to account for 30% of generation (23GW new capacity). However, meeting evening demand requires battery storage at scale.
Standard Bank has already supported this shift, arranging funding for 4 Round 1 battery projects in 2024. These include the Du Plessis Solar PV2 project near De Aar in the Northern Cape, co-developed by Mulilo and H1 Holdings, with Etana Energy as the offtaker, which will add 75MWac of clean, reliable energy to the grid. We also acted as co-mandated lead arranger and lender for Red Sands, Africa’s largest standalone battery storage project, a 153MW/612MWh facility that will boost grid resilience and advance South Africa’s energy transition.
Balancing the grid: 2025 to 2040
Currently, South Africa’s grid runs mostly on coal, which makes up around 80% of total energy. Eskom’s aging fleet runs at just 59% availability, creating a 2GW shortfall during evening peaks, manageable today with careful demand management.
By 2030, a combination of coal plant retirements, growing demand and potential delays in gas projects could push shortfalls up to 4GW. Even with renewables averaging 24% of generation, keeping the system stable will be harder.
By 2040, renewables are expected to dominate the mix, but backup from gas, nuclear or other sources will still be essential during periods when the sun doesn’t shine.
Private sector momentum
From mining companies to households, private generation is rapidly growing. Rooftop solar is reducing Eskom’s daytime demand, and household solar could help balance the grid if feed-in regulations improve.
However, Cresco warns that grid access delays, not tariffs, are now the biggest obstacle, with Bid Window 7 projects waiting for connections.
Act now or risk reversal
Without rapid progress on renewables, gas readiness, storage and transmission, South Africa risks falling back into loadshedding. Get it right and the nation can build a modern, reliable and affordable power system.
“We are looking forward to the opening of the South African Wholesale Energy Market by April 2026, which will open the transparency around Eskom generation and allow for more accurate energy projections,” says Executive Director, Cresco Group Robert Flutter.
Download the 2025 Energy Market Projections report from Cresco and Standard Bank CIB here.