South Africa’s IRP 2025 presents transformative renewables roadmap

At the end of March 2025, the South African government rolled out a Renewable Energy Masterplan (PDF 58 pages / 2.1MB), which outlined a comprehensive framework to develop the country’s burgeoning renewable energy industry.

Less than seven months later, on 15 October, South Africa’s cabinet approved the Integrated Resource Plan 2025 (IRP 2025) (PDF 64 pages/ 4.3MB) which sets out a bold roadmap for the transformation of South Africa’s energy landscape.

As a forward-looking strategy, the IRP 2025 aims to establish a sustainable power system that ensures long-term energy security, supports emission reductions, promotes environmental sustainability and drives industrial and economic growth. The ambitious plan envisages the procurement of 34 GW wind, 25 GW solar PV, 8.5 GW battery storage, and 16 GW distributed generation by 2039, signalling a strong policy commitment to clean energy and creating a predictable investment environment. 

The majority of the country’s energy is currently generated from coal, with renewable energy providing 8.8% of electricity in the power grid in the 2023-24 financial year. As the country looks to shift away from coal-based generation towards cleaner technologies, including solar, wind, nuclear, gas and battery storage, the IRP 2025 presents a number of significant opportunities, challenges and solutions for independent power producers (IPPs), contractors and offtakers.

The IRP’s commitments

The IRP 2025 aims to improve energy security in the country to help balance supply and demand for electricity and prevent the types of disruptions and load shedding that that have blighted the economy in recent years.

The plan outlines the country's long-term electricity supply and demand strategy and targets the procurement of 105,000 megawatts (MW) of additional generation capacity by 2039, from various energy sources. This is more than two and a half times the current energy capacity of state-owned energy utility, Eskom, which is approximately 50,230 MW. This commitment is designed to support a 3% GDP growth rate by 2030, positioning reliable electricity supply as a critical driver of industrialisation, economic development and job creation.

The IRP 2025 emphasises state-led procurement through large-scale bid windows, which signals a departure from the historical overreliance on market forces. The plan’s implementation is projected to cost R2.2 trillion, providing funding to develop new generation capacity, infrastructure upgrades, and green industrialisation projects.

The plan establishes a number of short-term capacity goals, which are to be introduced by 2030:

• solar PV: 11,270 MW
• wind: 7,340 MW
• gas-to-power: 6,000 MW
• storage: 3,100 MW
• distributed generation: 5,400 MW
• clean coal demonstration plant: operational by 2030

It also outlines further medium-to-long term goals to be fulfilled between 2023 and 2039:

• solar PV: 25,000 MW
• wind: 34,000 MW
• gas-to-power: 16,000 MW
• storage: 8,500 MW
• distributed generation: 16,000 MW
• ·nuclear: 5,200 MW (potentially expanding to 10 000 MW)

Wind power

The plan lays out a commitment to expand wind energy from 8% to 24% of South Africa’s installed generation capacity by 2039, reaching a total of 34GW. This anticipated substantial increase underscores wind power’s emerging role as a foundational resource in the country’s clean energy transition.

Despite an investment of approximately R100 billion (approx. US$5.85bn) to bring 3,614 MW of wind generated energy online, the rollout of new wind projects has been hindered by persistent grid constraints and regulatory bottlenecks.

To deliver IRP 2025’s targets, it is imperative that the government supports and accelerates the rollout of the Independent Transmission Projects programme to expand grid capacity to accommodate additional wind energy projects. According to the South African Renewable Energy Grid Survey, up to 10,279 MW from wind projects could be connected if existing grid constraints are addressed.

Nuclear power

The plan allocates 5,200 MW of new nuclear capacity by 2039, with potential expansion of up to 10,000 MW, subject to the outcomes of the Nuclear Industrialisation Plan (the Nuclear Plan). This targeted capacity is intended to replace aging coal-fired plants and provide clean baseload power to complement intermittent renewables like solar and wind.

A panel will be convened to design South Africa’s nuclear strategy, the Nuclear Plan, which includes possibly reviving the Pebble Bed Modular Reactor (PBMR) project, a once world-leading small modular reactor (SMR) initiative that was shelved in 2010 after more than R10 billion had been invested in the project.

The Nuclear Plan will also determine the minimum viable nuclear capacity – targeting up to 10,000 MW – required to achieve economies of scale across the entire nuclear fuel cycle, from uranium mining and enrichment to fuel fabrication, reactor operation, and waste management. The Nuclear Plan looks to localise and domesticate key components of the nuclear value chain to reduce reliance on imports and stimulate local industry.

The Minister of Electricity and Energy asserts that nuclear is essential to providing reliable baseload power when renewable sources are offline. The cabinet of South Africa will be requested to support the reopening of the PBMR centre at Pelindaba, with a view to integrating nuclear into the broader energy mix and rebuilding South Africa’s nuclear supply chain. The PBMR project will be transferred from Eskom to the South African Nuclear Energy Corporation (NECSA). NECSA will be expected to demonstrate the technology and prove its competitiveness relative to other SMRs currently under development globally.

Koeberg and Thyspunt have been earmarked as strategic sites for advancing South Africa’s nuclear development. Koeberg, home to the country’s only commercial nuclear power station, offers a well-established foundation with existing infrastructure, skilled personnel, and regulatory frameworks. Its expansion, with unit 2 recently granted a 20-year licence extension, is expected to be both cost-effective and logistically feasible, leveraging current transmission networks and safety systems.

By contrast, Thyspunt has been identified as a greenfield site for future nuclear development. While it will require significant infrastructure investment, this development promises to unlock new industrial corridors and job creation opportunities.

Both sites are pivotal to achieving the 10,000 MW nuclear target, offering the physical capacity and strategic positioning essential for a large-scale nuclear rollout.

Gas-to-power

The IRP 2025 forecasts 6,000 MW of gas-to-power capacity by 2030, increasing to 16,000 MW by 2039. It also raises the minimum load factor for gas plants to 50%, indicating a strategic shift toward more baseload gas generation rather than flexible peaking plants.

South Africa’s current gas supply is heavily reliant on the Pande Temane field in Mozambique, transported via the ROMPCO pipeline – a joint venture between the governments of South Africa and Mozambique. These fields are nearing depletion with approximately 75.91% of reserves already exhausted and Sasol, the sole importer, is expected to cease third-party gas supply by mid-2027.

With no large-scale domestic production to offset this decline, the country faces a looming ‘gas cliff’ that threatens industrial operations and the viability of gas-to-power projects unless alternative sources are secured.

The decision to raise the gas-to-power load factor is intended to anchor gas demand for the country’s industrial users. Therefore, this demand is expected to facilitate the importation of liquefied natural gas (LNG) to avoid the impending gas cliff.

To mitigate the gas cliff and support the IRP 2025 targets, South Africa is developing its first LNG import terminal at Richards Bay:

• phase 1 is expected to be operational by 2028 and includes a floating storage unit (FSU) and onshore regasification infrastructure capable of producing 400 million standard cubic feet per day. As of November 2025, this phase of the project is still in the pre-investment phase, with the final investment decision expected in 2026, which will be contingent on securing customer commitments. A pipeline connection will link the terminal to the Lilly pipeline, enabling distribution to Richards Bay Industrial Development Zone and beyond; and
• phase 2 intends to replace the FSU with a 220,000m³ onshore tank, increasing send-out capacity and supporting national gas-to-power projects.

This project forms part of a broader $5.7 billion port modernisation plan, which is vital to unlocking the 6,000 MW of gas-to-power capacity by 2030. The associated infrastructure is critical for ensuring energy security beyond 2027 and realising the IRP 2025’s gas ambitions.

However, with the final investment decision scheduled for 2026, there is a narrow window to avert the looming gas cliff hitting in 2027 and to achieve the project’s targeted commercial operational date in 2028. Without accelerated development of the project and pipeline upgrades, the 6,000 MW target by 2030 may be unattainable.

Battery energy storage

The IRP 2025 targets 8,500 MW of additional battery energy storage system (BESS) capacity by 2039. Energy storage capacity is critical to managing the intermittency of renewables and reducing reliance on fossil-fuel based peaking plants. To date, South Africa has secured 1.7 GW/11 GWh of grid-scale BESS capacity through the Battery Energy Storage Independent Power Producer Procurement Programme. Bid window 3 alone awarded 616 MW of BESS capacity. In addition to the public offtake market, developers can tap into a substantial private offtake opportunity driven by growing demand from mines, data centres, and industrial users. These entities are increasingly seeking to integrate wind or solar generation with battery storage, through both behind-the-meter and ‘wheeled’ solutions, which can offer a more sustainable, cost-effective power solution.

Steps to unlocking investment

The plan is expected to unlock R2.23 trillion in investment over the next 10-to-15 years, largely funded by private sector participation through IPP procurement and power purchase agreements (PPAs). 

The IRP 2025’s increased renewable allocation compared to earlier drafts reflects responsiveness to investor feedback and sets the stage for more projects to be awarded under the various IPP procurement programmes.

Businesses are encouraged to start positioning themselves to prepare bids for future IPP procurement programmes. It will also be critical to engage early with the relevant departments, including the Department of Electricity and Energy and the National Energy Regulator of South Africa on licensing and compliance.

The IRP 2025 presents a transformative roadmap for South Africa’s energy future, unlocking significant opportunities across wind, nuclear, gas, and storage technologies. Realising this vision, however, hinges on addressing legal and regulatory bottlenecks, ensuring policy coherence, and strengthening public-private collaboration. For IPPs and developers, the coming decade presents immense opportunities, provided appropriate enabling frameworks are in place.

Co-written by Nombasa Mazwai and Njabulo Gumede of Pinsent Masons.