Introduction
In March 2025, the South African Cabinet approved the South African Renewable Energy Master Plan (SAREM), marking a significant milestone in the nation's transition towards a sustainable energy future. Spearheaded by the Department of Mineral Resources and Energy (DMRE), SAREM aims to promote the industrialization and localization of South Africa's renewable energy and storage value chains, while supporting the country's shift from a centralized, carbon-intensive energy model to a decentralized, low-carbon structure.
Strategic Objectives of SAREM
Annual Renewable Energy Deployment Targets
SAREM sets ambitious targets, including the deployment of at least 3 GW of new renewable energy projects annually, increasing to 5 GW by 2030. This scale is deemed sufficient to support the growth of local manufacturing operations, as most component manufacturing requires 1 GW or less of annual demand over a minimum period of five years to be economically viable. The plan also anticipates the creation of 25,000 jobs in the renewable energy and storage sectors, contributing to economic growth and employment.
Focus on Key Technologies
The plan focuses on key technologies such as solar and wind energy, lithium-ion batteries, and vanadium-based battery storage. By fostering local manufacturing and reducing reliance on imports, SAREM aims to enhance energy security and stimulate economic development. The government emphasizes that the plan is a living document, designed to adapt to evolving technological advancements and market dynamics.
Government Endorsement and Implementation
Minister of Electricity and Energy, Kgosientsho Ramokgopa, highlighted the importance of SAREM in achieving a sustainable and inclusive energy transition. He stated that the plan is integral to South Africa's efforts to decarbonize its electricity supply, promote industrial development, and create decent jobs. The minister also noted that SAREM aligns with the country's broader economic growth-focused programs and structural reforms aimed at creating a conducive environment for job creation.
Recent Developments in South Africa's Renewable Energy Sector
Solar Capacity Additions in 2024
In 2024, South Africa added approximately 1.1 GW of solar capacity, according to figures from the South African Photovoltaic Industry Association (SAPVIA). This figure, while lower than the 2.6 GW added in 2023, still represents a significant contribution to the continent's renewable energy growth. The decline is attributed to the suspension of load shedding and increased competition in the market.
Pipeline of Projects and Future Outlook
SAPVIA reports a robust pipeline of projects, with 2,880 MW across 454 projects registered in 2024. These projects are at various stages of operation, construction, and financial close, with many expected to become operational in 2025 or 2026. Additionally, six utility-scale solar projects totaling 708 MW reached financial close across 2023 and 2024, with construction commencing in early 2025.
REIPPPP Bid Window 7
The seventh round of South Africa’s Renewable Energy Independent Power Producer Procurement Program (REIPPPP) resulted in 1,760 MW of capacity across eight projects at an average tariff of $0.0252/kWh. These projects are expected to reach financial close in early 2026, before entering into construction throughout that year.
Conclusion
The approval and implementation of SAREM, coupled with ongoing developments in the renewable energy sector, underscore South Africa's commitment to a sustainable energy future. By setting clear targets, focusing on key technologies, and fostering local manufacturing, the country is poised to enhance energy security, stimulate economic growth, and contribute to global efforts in combating climate change.
