Our last few Sustainable Manufacturing guides have tracked the changes in the energy industry in South Africa. This year, I found that the story has moved on still further.
South Africa’s manufacturing sector has been hard on the environment. It was built on coal, chemicals and heavy industry, and accounts for more than 38% of the country’s total energy consumption. Sasol alone is responsible for nearly 15% of national greenhouse gas emissions. Changing this is not easy, but something is shifting. Over the past couple of years, a combination of government policy, commercial self-interest and industry partnerships has set South Africa on a more credible path toward greener industrial production.
The energy arena is different now. Two years ago we were emerging from Stage 6 loadshedding. Now rooftop solar capacity in South Africa has passed 8,3 GW, far more than the combined 2,8 GW installed capacity of the government’s renewable energy programmes. It’s interesting to see what drove this change. The steepest growth came during 2022 and 2023, when the motivation was survival. Loadshedding ended, but the number of solar installations kept climbing, driven by the economics of Eskom tariffs rather than necessity. Once the survival phase was over the economics phase began, and it has become a more sustainable driver.
The same pattern is emerging in the rapid growth of battery energy storage. This is being driven by the need to manage intermittent solar and wind generation, improve grid reliability, reduce dependence on Eskom, and give large energy users greater control over their electricity supply. Eskom’s HEX system in Worcester is Africa’s first utility-scale battery energy storage system, while Globeleq’s Red Sands in the Northern Cape is Africa’s largest standalone system. Then there is SOLA’s Naos-1, based on a new business model where private companies bypass Eskom and the grid altogether. It uses solar together with storage to supply customers like Sasol and Air Liquide directly.
Water is the next bottleneck. Coal-fired power is still our largest electricity source and one of the most water-intensive industrial processes in the country. Even cleaner alternatives such as green hydrogen need water somewhere in the chain. This is the technology aiming to decarbonise the parts of industry that solar cannot reach, such as steel, ammonia and aviation fuel. Our flagship local project is the Coega Green Ammonia development near Gqeberha, led by Hive Hydrogen. This plant is pairing a 1,2 GW electrolyser with 3,6 GW of solar and wind to produce up to 1,2 million tons of green ammonia a year for export.
However, splitting water into hydrogen and oxygen takes a great deal of water, and the sites chosen for their solar and wind resources do not have surplus water. The CSIR’s Hydrogen Valley plan for the west coast addresses this by relying on renewable-powered desalination rather than municipal supplies, a practical solution.
The circular economy is a key part of a sustainable manufacturing strategy, and another emerging area worth watching is waste, where there is an interesting parallel with rooftop solar. South Africa currently recovers around R8,2 billion a year from its waste, against an estimated R36 billion that would be available if recovery rates improved and landfill costs were phased out. The same logic that put panels on factory roofs is starting to play out here, economics.
The government’s Extended Producer Responsibility (EPR) has been mandatory for paper and packaging producers since 2021. It holds companies financially and operationally responsible for the entire lifecycle of their products, particularly during the post-consumer waste stage. This has created more than 24 000 jobs and now supports 47 000 waste pickers. The draft National Waste Management Strategy also aims to divert 40% of waste from landfill within five years and move the country toward a sustainable circular economy. Waste pickers already process the bulk of recycled materials without any policy in place, much as factory owners simply went ahead and put solar on their rooftops. If this takes off for economic reasons, there is no reason why the circular economy could not also see a turning point within the next few years.
These developments happened because the economics changed and industry adapted rather than because South Africa became more environmentally conscious. Today we worry about the water we need to keep the power on and the lost value sitting in our waste. We have made huge progress, but now the problems are different. I am confident that industry will again adapt and rise to the occasion, driven by economics.
Our guide highlights the companies in this industry that are working on these problems. I hope you find their contributions as encouraging as I do.
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