After more than a decade of power shortages and recurring load shedding, South Africa’s electricity system has shown notable signs of recovery. By early June 2026, the country recorded over 385 consecutive days without supply interruptions, supported by improved generation performance and lower unplanned outages. The operational turnaround has also reduced South Africa’s state-owned electricity utility Eskom’s reliance on costly diesel-fired generation and strengthened confidence in the national power system.
However, sustaining this progress will depend on transmission expansion. South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has successfully mobilised private capital, expanded generation capacity, with 97 operational renewable energy projects contributing more than 8 GW to the grid, and reduced procurement costs. However, grid constraints remain a key bottleneck to connecting new projects, particularly in renewable-rich regions such as the Northern, Western and Eastern Cape.
To address this challenge, the Integrated Resource Plan (IRP) 2025, approved in October 2025, and the National Transmission Company South Africa’s (NTCSA) Transmission Development Plan (TDP) 2025-34 (released in late 2024) place transmission infrastructure at the centre of the country’s energy transition. The IRP 2025 outlines a ZAR 2.23 trillion investment programme to add more than 105 GW of new non-coal generation capacity by 2039 and targets a net zero electricity sector by 2050. The plan envisages significant additions in wind, solar PV, battery storage, gas-to-power, distributed generation and nuclear capacity. To accommodate this new build-out, the latest TDP estimates supporting about 107 GW of grid-connected generation capacity by 2034 will require nearly 14,500 km of new transmission lines and 133,000 MVA of transformer capacity, to be built at an investment of ZAR 390 billion.
Broader sector reforms are also supporting transmission expansion. The establishment of the NTCSA as a legally separate subsidiary within Eskom marked a significant step towards the utility’s unbundling and the transition to a more transparent and competitive electricity sector. Initially, transmission separation was planned within an Eskom subsidiary structure, but this was revised in February 2026 in favour of full independence, with a dedicated government task team under the National Energy Crisis Committee mandated to finalise implementation in 2026. Further reforms under the Electricity Regulation Amendment Act, 2024 are expected to facilitate the development of the competitive South Africa wholesale electricity market, expand non-discriminatory third-party grid access, establish transmission planning and system operation as more independent functions, and strengthen the role of the National Energy Regulator of South Africa. These measures are intended to attract new investment, improve network utilisation and accelerate the integration of renewable energy at scale.
Complementing these reforms, the Independent Transmission Projects (ITP) programme aims to mobilise private capital and expertise for the delivery of strategically important transmission infrastructure, helping to accelerate grid expansion and meet the substantial network investment requirements outlined in the IRP 2025 and NTCSA’s TDP 2025-34. The scale of the planned investment underscores the importance of these reforms. Eskom’s latest five-year capex plan for 2026-27 to 2030-31 totals ZAR 343 billion, with almost half (ZAR 157 billion) allocated to NTCSA alone.
Together, these plans highlight that transmission infrastructure is the critical enabler of South Africa’s long-term energy security and renewable energy ambitions.
Changing generation mix and rising
demand
South Africa’s electricity mix is set for a significant transformation over the coming decades. As of 2025, coal accounted for around 59 per cent of installed generation capacity, or roughly 41 GW of the country’s 69 GW fleet. Under the IRP 2025, coal’s role will steadily decline as ageing plants retire to be replaced by a more diversified mix. In the near term, the plan calls for the addition of 10.3 GW of solar PV, 7.3 GW of wind, 3.7 GW of battery energy storage systems and 6 GW of combined-cycle gas turbine (CCGT) capacity between 2026 and 2030. Consequently, renewable energy capacity will increase to over 45 GW by 2030 from about 17 GW in 2025. This expansion will be driven by both public procurement through the REIPPPP and growing private sector investment enabled by electricity market reforms and the liberalisation of generation licensing requirements.
Coal retirement is the defining structural stress test for the transmission system. The first wave – 8 GW coming offline between 2029 and 2030 – coincides with the commissioning deadline for the 6 GW gas CCGT programme (under the Reference scenario), a sequencing risk flagged by the IRP. The second wave, retiring another 15 GW of Mpumalanga-based coal capacity between 2034 and 2042, will require a significant reconfiguration of transmission flows from new renewable generation zones in the Northern and Western Cape regions northward to industrial heartlands in Gauteng and Mpumalanga. This is one of the key transmission challenges that the TDP aims to address. South Africa’s renewable resources are concentrated in the coastal and Karoo regions, far away from the industrial load centres. The grid must bridge this gap.
In fact, the country’s IPPPP scheme has established independent power producers (IPPs) as the cornerstone of the country’s electricity supply. As of December 2025, 103 IPPs were operational, delivering 8,135 MW to the grid across renewable energy, risk mitigation (technology agnostic) and peaker (diesel/gas) programmes. The REIPPPP alone accounts for 97 operational projects generating 139,798 GWh of energy, which is equivalent to the annual consumption of over 42 million households. The programme has attracted ZAR 298.9 billion in investment, with ZAR 239 billion from the REIPPPP’s bidding windows (BW) 1-6, and has driven tariff reduction through competition, with BW7’s average portfolio cost reaching ZAR 0.53 per kWh. The pipeline remains substantial. Eighteen BW7 solar PV projects (3,940 MW) are working towards commercial close, alongside five battery energy storage IPPPP (BESIPPPP) BW1 projects (513 MW) under construction, 13 BESIPPPP BW2/BW3 preferred bidders (1,231 MW combined) progressing towards commercial close and 2 risk mitigation IPPPP projects (183 MW) expected to come online in 2026.
The IRP 2025 projects 114,420 MW of new capacity additions through 2042, highlighting the urgency of resolving grid constraints and strengthening procurement mechanisms to ensure that future bidding windows can reliably translate planned capacity into operational projects.
Another key driver for transmission is growing demand. The moderate demand scenario in the IRP 2025 forecasts an average annual electricity demand growth of 1.5-2 per cent, increasing the total demand to 255 TWh by 2029-30 and continuing to rise through to 2050. The TDP 2025-34, which is built around a moderate-high demand scenario, assumes 1.5 per cent short-term growth and 2 per cent long-term growth. Under this scenario, peak demand is projected to reach 43 GW by 2034, aligning closely with the reference case in the draft 2023 IRP, the immediate predecessor of the IRP 2025.
Transmission expansion
South Africa’s grid was built for centralised coal power generation, but the rapid growth of wind and solar requires a more flexible network capable of managing large-scale, variable and two-way power flows. To support rising electricity demand and integrate new generation capacity, between 2026 and 2034, the TDP outlines the need for 14,494 km of new transmission lines (including 5,044 km by as early as 2029), 127,422 MVA of transformer capacity (over 36 GVA by 2029) and 44 substations (15 by 2029) – a dramatic acceleration from less than 200 km of lines and 6 GVA added over the previous four years.
Almost the entire expansion will be at the extra high voltage level, with the planned addition of 7,477 km of 400 kV lines and 6,957 km of 765 kV lines, reflecting the growing need for long-distance bulk power transfers from renewable energy hubs in the southern regions to major demand centres in the north. For this, the TDP prioritises the development of new south-north routes and the expansion of existing transmission corridors. This includes the expansion of 765 kV corridors across the Northern and Central Cape, together with new links between the Eastern Cape and KwaZulu-Natal, complemented by targeted upgrades to the 400 kV network. These will help increase transfer capacity and relieve congestion, besides facilitating large-scale renewable integration.
In addition, eight synchronous condensers – critical for maintaining system inertia and voltage stability as inverter-based renewable generation displaces synchronous thermal plants – are required within the study period, with seven of them by 2029.
The planned transmission line addition is concentrated in the renewable-rich Northern Cape/Hydra Central (5,124 km) and Eastern Cape (3,102 km), which together account for nearly 58 per cent of new lines. Significant expansion is also planned in the Western Cape (1,553 km) and KwaZulu-Natal (1,054 km), while Limpopo and Mpumalanga will each receive 824 km of new lines. In contrast, Free State (832 km), North West (688 km) and Gauteng (197 km) will each receive less than 1,000 km of new lines.
Investment and financing
As already mentioned, Eskom has allocated ZAR 343 billion in capex across its generation, transmission and distribution businesses during 2026-31, as outlined in its revised FY 2027 Corporate Plan presented to the Standing Committee on Appropriations in March 2026. Critically, the plan is intended to be entirely internally funded, with participative or private sector participation-type project funding explicitly excluded, though the document notes that such structures could expand investment capacity beyond the current cap.
Transmission accounts for the largest share of the programme, with an allocation of ZAR 157 billion, as compared to ZAR 124 billion for generation and ZAR 39 billion for distribution. Within transmission, ZAR 103 billion is directed towards expansion projects (new lines and transformers), while ZAR 32 billion covers grid code and environmental compliance and ZAR 24 billion addresses grid stability. A further ZAR 22 billion within the sustaining category covers maintenance and refurbishment of the existing transmission grid.
To partially fund the capital programme, Eskom plans to raise approximately ZAR 75 billion in new incremental debt over the corporate plan period, directed specifically at emissions reduction, clean energy generation and transmission network expansion. Gross debt securities are projected to fall from ZAR 448 billion during the third quarter of FY2026 to below ZAR 300 billion by FY2031, reflecting the utility’s parallel objective of deleveraging the balance sheet as it pursues investment-grade credit status.
The programme faces significant challenges. Earnings before interest, taxes, depreciation, and amorisation margins are projected to remain in the mid-20 per cent range through the plan period, below the 30 per cent threshold Eskom considers necessary for sustainable capital expansion. Municipal arrear debt, which stood at ZAR 110.5 billion in December 2025 and is projected to reach ZAR 116 billion by FY 2026, is the most significant risk. If left unchecked, it could exceed ZAR 300 billion by FY2031, undermining the gains of the government’s ZAR 254 billion debt relief programme.
These financial pressures on Eskom are also affecting the timing of NTCSA’s separation. The Eskom Debt Relief Act (2023) restricts borrowing and capital use, limiting NTCSA’s ability to become fully independent despite progress, such as lender consent for separation and related agreements with the National Treasury. However, weak finances, rising municipal arrears and insufficient cost-reflective tariffs continue to constrain revenue certainty and access to commercial debt. As a result, NTCSA’s full independence remains dependent on improvements in Eskom’s overall financial position.
ITP programme
On its part, the Department of Electricity and Energy (DEE) launched the ITP programme in December 2024 to reduce pressure on Eskom and unlock stalled renewable energy deployment by addressing transmission shortages through public-private partnerships. Following a request for pre-qualification issued in July 2025, seven international bidders were shortlisted in December 2025 to participate in the programme’s first phase, which targets 1,164 km of new 400 kV lines and associated infrastructure across Northern Cape, North West and Gauteng, addressing some of the country’s most pressing grid constraints. The DEE is expected to issue a request for proposal (RfP) in the second half of 2026. The RfP is aligned with the planned launch of a credit guarantee vehicle (CGV) intended to support project bankability in the absence of direct sovereign guarantees. The CGV, structured as a private non-life insurance company regulated by the prudential authority, is targeted to become operational in the second half of 2026, with the National Treasury committing seed equity of ZAR 2 billion. The World Bank board approved $350 million in financing for the CGV in March 2026, with additional capital expected from other development finance institutions, potentially increasing total capitalisation to $2.5 billion.
The way forward
As renewable energy deployment accelerates and ageing coal stations retire, grid infrastructure will play a central role in connecting new generation capacity to demand centres and maintaining system reliability. South Africa’s grid expansion and transmission reforms represent a major structural shift aimed at addressing long-standing grid constraints that have limited new generation capacity and slowed economic growth. Eskom’s unbundling and the creation of an independent transmission system operator through NTCSA are central to this effort, alongside investments in new transmission infrastructure under the TDP, including through the ITP programme. This will help modernise the grid, enable non-discriminatory access and support renewable energy integration. While the reforms face financial and implementation challenges, they are essential for strengthening system reliability and enabling long-term energy transition goals. If effectively implemented, the programme will unlock investment, improve grid performance and enable the creation of a more resilient and competitive electricity system.
