Powering South Africa’s Just Energy Transition

The problem that required a solution

PwC, in collaboration with the Development Bank of Southern Africa (DBSA), the Presidential Climate Commission (PCC), the National Planning Commission (NPC), and National Treasury through its SA-TIED programme, led a strategic study to assess the energy infrastructure investments required between 2024 and 2050. The initiative aimed to support South Africa’s energy security, climate commitments, and net-zero targets by 2050.

Purpose and objectives 

The study aimed to: 

• Assess energy infrastructure investments needed to meet South Africa's Nationally Determined Contributions (NDCs), National Development Plan (NDP), and National Infrastructure Plan (NIP) 2050 ambitions 
• Enable cost-effective electricity access for communities
• Evaluate the funding gap to achieve these outcomes 
• Provide 90% electricity access to all areas by 2030, with non-grid options for remaining areas 
• Reduce the annual carbon emissions by 2030 

PwC, supported by Osmotic Engineering Group (OEG), conducted power systems modelling to identify least-cost energy pathways and performed sensitivity testing across variables such as carbon emissions limits, fuel prices, and air quality compliance. PwC supported the analysis by applying an enhanced World Bank methodology to estimate investment needs, grid expansion, and operational costs from 2024 to 2050, while also conducting market sounding to assess available capital and funding gaps. Additionally, PwC completed a policy and regulatory review, identifying barriers and enablers to investment and proposing recommendations based on international best practices. 

Through our collaboration, we were able to uncover several critical insights that inform strategic decision-making and future planning:

• Investment requirements quantified: Clear financial estimates were developed for each scenario, outlining the capital needed to support implementation across key sectors.
• Optimal technology mix identified: The most effective combinations of technologies were determined to meet decarbonisation and efficiency goals, balancing cost, scalability, and impact.
• Emissions pathways clarified: Projected emissions trajectories were mapped, showing potential reductions and alignment with national and global climate targets.
• Funding gap estimated: A significant gap between available and required funding was identified, highlighting the need for innovative financing mechanisms and stakeholder engagement.
• Critical infrastructure priorities identified: Priority infrastructure areas—such as energy systems, transport networks, and digital platforms—were highlighted to support successful implementation.
• Regulatory and market barriers identified: Key policy and market constraints were outlined, with recommendations to address these barriers and enable smoother execution of the proposed pathways.

Through this study, South Africa is able to make informed energy transition policy decisions, attract targeted private sector investment, design effective funding mechanisms, prioritise critical infrastructure development, and meet international climate commitments while ensuring energy security.

Strategic alignment / SDGs 

• Affordable and clean energy
• Climate action
• Decent work and economic growth