Minister Dion George
By Thabo Mosia
Pretoria, 14 April 2025 – Minister of Forestry, Fisheries and the Environment, Dr Dion George, has welcomed Eskom’s recent issuance of a tender to establish a separate renewable energy business unit, a move he says will fast-track South Africa’s shift to cleaner energy. “This significant step reflects Eskom’s dedication to accelerating renewable energy deployment and supporting South Africa’s transition to a cleaner, more sustainable energy future, consistent with the nation’s Just Energy Transition (JET) objectives and commitments under the Paris Agreement,” George said on Monday. The initiative marks a pivotal moment in addressing the country’s energy challenges while aligning with global climate goals.
A Bold Step Towards Renewable Energy
Eskom’s tender, announced in early April 2025, aims to create an independent subsidiary focused solely on renewable energy. This unit will operate with flexibility, encouraging public-private partnerships to harness South Africa’s vast solar and wind potential. “The establishment of this independent subsidiary, structured to operate with agility and encourage public-private partnerships, directly addresses those conditions,” George noted, referencing the conditional emissions exemptions he granted to Eskom’s coal-fired power stations on 31 March 2025. Those exemptions came with strict requirements to prioritise renewable integration, reflecting the urgent need to reduce reliance on coal, which generates 80% of South Africa’s electricity.
South Africa’s energy sector faces immense pressure. Frequent load shedding, costing the economy R4 billion daily at its peak in 2023, has highlighted the need for reliable, sustainable power. Coal plants, like those at Medupi and Kusile, emit 200 million tonnes of CO2 annually, contributing to poor air quality that causes 20,000 premature deaths yearly, according to health studies. The new renewable unit aims to shift this trajectory, leveraging the country’s 2,500 hours of annual sunshine and wind speeds averaging 8m/s in coastal areas—ideal for solar and wind farms.
Aligning with Climate Commitments
The tender aligns with South Africa’s Just Energy Transition (JET), a framework to balance economic growth with environmental sustainability. Under the Paris Agreement, the country committed to reducing emissions to 350–420 million tonnes by 2030, per its Nationally Determined Contributions (NDCs). The 2050 net-zero target looms large, with renewable energy expected to supply 40% of electricity by 2035, up from 11% in 2024. “It positions Eskom to capitalise on South Africa’s abundant solar and wind resources, enhance competitiveness, and secure green financing, while contributing to improved air quality and reduced carbon emissions,” George said.
Eskom’s initiative responds to the Minister’s March exemptions, which allowed coal plants to operate beyond Minimum Emissions Standards (MES) temporarily, provided renewable projects accelerate. The MES, enforced since 2010, cap pollutants like sulphur dioxide at 3,500 mg/Nm³, but compliance has been uneven, with Eskom spending R40 billion on retrofits since 2015. The renewable unit could unlock R100 billion in green financing from partners like the World Bank, which pledged $8.5 billion to JET in 2022, easing Eskom’s R400 billion debt burden.
Call for Transparency and Inclusion
George stressed the need for a fair tender process, urging Eskom to ensure “a transparent, competitive, and inclusive” approach that taps local and international expertise. “The Department of Forestry, Fisheries and the Environment will closely monitor the initiative’s progress to ensure alignment with South Africa’s Nationally Determined Contributions (NDCs), the 2050 net-zero emissions target, as well as the stringent conditions imposed on Eskom on 31 March 2025 that support compliance with the Minimum Emissions Standards (MES),” he said. This oversight aims to prevent delays, like those in Eskom’s 2019 restructuring, which stalled due to bureaucratic hurdles.
The tender has sparked excitement among local businesses. South Africa’s renewable sector employs 15,000 people, with projects like the Karoo’s 500MW solar farm creating 1,200 jobs in 2024. Communities on platforms like X have voiced hope that the unit will prioritise black-owned firms and rural areas, where 40% of households lack reliable electricity. International players, such as Denmark’s Vestas, are also eyeing the tender, given their success in supplying 1GW of wind turbines to South Africa since 2010.
Private Sector’s Role in Innovation
George called on Independent Power Producers (IPPs) and the private sector to drive innovation, saying, “Through collective effort, South Africa can build a resilient, inclusive, and environmentally sustainable energy sector that upholds the constitutional mandate to protect the health and well-being of all its citizens.” IPPs have been crucial, adding 6GW of renewable capacity since the Renewable Energy IPP Procurement Programme began in 2011. Companies like Scatec Solar, operating 1.2GW of plants, are poised to partner with Eskom’s new unit, potentially doubling output by 2030.
Private investment is vital, as Eskom’s capital expenditure hit R60 billion in 2024, yet grid upgrades lag. The unit could fast-track projects like offshore wind farms near Mossel Bay, where studies show a 10GW potential, or green hydrogen plants in Coega, projected to export $1 billion by 2035. These align with the JET Investment Plan, targeting 1.8 million jobs by 2050, especially in provinces like Northern Cape, which hosts 60% of solar capacity.
Economic and Environmental Benefits
The renewable unit promises significant impacts. Economically, it could save R20 billion annually by cutting coal imports, which cost R15 billion in 2024. Solar and wind are now 30% cheaper than coal per kilowatt-hour, with levelised costs at R0.80 versus R1.20. Environmentally, scaling renewables to 20GW by 2030 could slash emissions by 50 million tonnes yearly, easing health burdens in coal-heavy regions like Mpumalanga, where asthma rates are 25% above the national average.
Rural communities stand to gain most. Microgrids, like those piloted in Upington, power 5,000 homes with solar, reducing reliance on diesel generators. The unit’s focus on public-private partnerships could replicate this nationwide, addressing energy poverty affecting 10% of South Africans. Women, who make up 70% of rural household heads, benefit from cleaner energy, cutting indoor pollution from wood stoves, a factor in 1,000 deaths yearly.
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