The South African energy market is at a critical – but exciting – stage. Rising electricity costs, growing pressure to cut carbon emissions, and a national grid under strain have created the perfect push for businesses to switch to renewable energy or risk getting left behind in a low-carbon future.

For businesses still weighing up the move, one of the biggest hurdles they will encounter sooner rather than later is securing grid access. As more renewable energy projects come online and demand continues to climb, the ability to connect new projects to the grid is becoming increasingly limited, especially in regions with the best wind and solar resources. Wait too long, and your business could miss out entirely, or you could pay more in the future to connect.

Understanding Grid Constraints
According to the 2025 Generation Connection Capacity Assessment (GCCA) report by Eskom, the total remaining capacity for new projects nationwide is under 20 GW, and the regions best suited for wind and solar projects (Eastern Cape, Western Cape, Northern Cape and Hydra Central) are already maxed out. Other provinces still have some grid headroom, but only a few gigawatts, and that is disappearing fast.

What does this mean?

The risk is real for businesses that delay: you could miss the most favourable energy contracts and lose access to cost-effective locations. As early movers snap up prime grid connection points, latecomers may be forced to settle for less efficient, more expensive alternatives, or face long delays.

This is not just a technical limitation. Grid access is fast becoming a strategic business risk. Acting early is essential if your business is serious about energy resilience and long-term cost certainty.

Delay or Mayday?

For companies still weighing their options, the stakes of inaction are high. South Africa’s electricity prices have steadily risen for years, with Eskom tariffs consistently outpacing inflation. In 2003/04, the electricity cost per kilowatt-hour (kWh) was about R0.16/kWh. If prices had followed CPI since then, we would be paying around R0.50/kWh today. Instead, the average cost is R2.06/kWh – four times higher than inflation-linked pricing. This trend shows little signs of easing up.

Looming Carbon Taxes

It is not just electricity prices that are rising. The introduction of local and international carbon taxes adds further financial pressure. By 2031, as carbon taxes increase in South Africa and current tax allowances are gradually phased out, there is expected to be a pass-through price impact on electricity that does not come from renewable sources. Over time, carbon taxes could comfortably increase electricity generation costs by more than 20%.

And from early 2026, businesses exporting to Europe will also be required to pay the price differential between our lighter carbon tax regime and Europe’s under the Carbon Border Adjustment Mechanism (CBAM) – where the price of carbon is about six times higher.

Beyond the direct costs, reputational risk is growing. As sustainability becomes a key metric for investors and consumers alike, companies that delay the transition may see their environmental, social and governance ratings suffer. This can lead to decreased investor interest and damage to brand reputation. In contrast, those that move early on will be well-positioned to enhance their market position and win over eco-conscious consumers and investors.

More Than Just Plugging in to Renewables

Beyond grid capacity, transitioning to renewable energy comes with its own set of challenges. Projects take time, often 18 to 24 months to build, with total timelines stretching to four years if permissions, negotiations and construction hit delays.

Then there are the technical and regulatory complexities.  

• Regulatory and financial complexity: Securing approvals, understanding emerging policies, and structuring energy deals is time intensive. Many businesses underestimate the expertise and capital planning required to get projects off the ground.
• Technical adjustments: Feeding renewables into the grid is not a simple plug-and-play. It demands detailed technical planning to ensure power quality and reliability, especially when upgrading existing grid infrastructure.

These are not reasons to wait — they are reasons to plan appropriately and partner wisely. Tackling these issues upfront is how businesses secure long-term energy savings and resilience.

Seizing the First-Mover Advantage

The benefits of moving quickly cannot be overstated. Companies that act now can lock in stable, favourable pricing and secure access to projects in strategic grid positions, putting themselves ahead of their competitors and mitigating future electricity price shocks.

Licensed electricity trader Discovery Green’s platform gives its clients this critical head start, helping businesses navigate the transition with a clear strategy: providing access to some of the largest wind and solar plants with secure grid capacity, locking in savings and price certainty through flexible agreements, and using its actuarial and data science skillset to ensure energy is only delivered when businesses need it. Its expertise in navigating regulatory, financial and technical landscapes ensures that its clients can confidently make decisions, knowing they are backed by industry-leading support and resources.

Act Now

With rising electricity prices, carbon taxes, and the market demanding sustainability, the case for renewables is stronger than ever. The window to secure prime grid access is narrowing, but it is still open for businesses to move. Do not wait until the grid is loaded with your competition – act now to ensure your business is not left behind in the race towards renewable energy.