South Africa’s state power utility has entered the renewable energy market with the creation of Eskom Green, a dedicated subsidiary focused on delivering utility-scale clean power projects. The new entity will also partner with large industrial consumers to help them achieve carbon reduction targets and navigate the energy transition.
Rivoningo Mnisi, Group Executive for Renewables at Eskom, explained that the move aligns with global best practices. After benchmarking leading utilities worldwide, Eskom identified sustainability-driven strategies as essential for long-term resilience—a principle now central to Eskom Green’s mandate.
Innovative Financing to Bypass Balance Sheet Constraints
While Eskom carries significant debt, Mnisi addressed financing concerns by highlighting the standard industry approach for renewable developments: project finance via Special Purpose Vehicles (SPVs). These legally distinct entities enable capital raising without placing direct pressure on Eskom’s core balance sheet. Eskom Green plans to attract international and domestic investors into these SPVs, fostering collaborative funding models for its project pipeline.
Leveraging Existing Assets to Overcome Grid Bottlenecks
Grid congestion remains a major hurdle for renewable developers in South Africa, especially in high-potential zones like the Northern Cape. Although a government-backed 13-year grid expansion plan aims to double transmission capacity, Eskom Green will pursue a near-term workaround.
Mnisi pointed out that Eskom owns extensive land parcels adjacent to existing substations and transmission lines. By siting new renewable projects near decommissioning or operational power stations, the utility can fast-track grid connections, reduce infrastructure costs, and scale deployments more efficiently over the next five years.
Phased Capacity Rollout: From 2026 to 2040
Eskom Green has published a clear, time-bound capacity roadmap:
- 2026: Market launch of a hybrid offering combining 2GW of solar PV and battery storage, alongside approximately 1.5GW of pumped hydro storage—totaling close to 4GW of new capacity.
- 2030: Delivery of 5.6GW from a diversified renewable mix, including wind energy.
- 2035: Scaling to roughly 21GW of installed renewable capacity.
- 2040: Achieving a cumulative 32GW of renewable generation.
Mnisi noted that 32GW approximates South Africa’s current peak electricity demand. However, he clarified that renewable sources typically operate at lower capacity factors than baseload technologies. Therefore, 30GW of wind and solar yields an effective output comparable to about 10GW of coal, gas, or nuclear generation.
Supporting Grid Stability with Complementary Technologies
To ensure reliable power supply alongside growing renewable penetration, Eskom will continue advancing complementary baseload and flexibility resources. This includes progressing a 3GW gas development programme by 2030 and maintaining the planned 5GW new nuclear build. Pumped storage expansion will also play a critical role in balancing intermittent generation and enabling higher renewable integration across the national grid.
Economic Opportunity Beyond Megawatts
Beyond energy security, Mnisi emphasized the industrialisation potential of Eskom Green’s ambitious pipeline. Despite a decade of renewable activity in South Africa, local manufacturing and clean job creation have remained limited. The utility’s 32GW-by-2040 vision could catalyse domestic supply chains—supporting factories that produce solar panels, wind turbine components, batteries, and balance-of-system equipment—while generating sustainable employment and contributing to inclusive economic growth.
Rivoningo Mnisi reaffirmed that Eskom Green represents a strategic pivot toward a diversified, sustainable, and locally beneficial energy future for South Africa.