The Renewable Energy 101

Renewable energy is like that friend everyone says you should meet, everyone insists it’s important, nobody explains why clearly, and you’re not sure if you actually need it in your life.

Why This Became a Thing

Two forces converged to make renewable energy a global priority:

Resource Constraints: The Energy Institute estimates 56 years until oil reserves run out. While these predictions have been wrong before, extraction costs are definitely rising as easily accessible reserves deplete.

Climate Policy: Fossil fuels provide 80% of global energy supply but release carbon dioxide. Most governments now view transitioning away from them as necessary, regardless of whether you agree with the urgency.

The South African Reality

South Africa relied on fossil fuels for 83% of its electricity in 2024, with coal meeting around 70% of primary energy demand. But by May 2024, most growth is coming from businesses and households installing their own systems, not government initiatives.

The national average electricity tariff increased 10% annually from 2014 to 2024, compared to 5.2% inflation. Load-shedding has made energy security a business priority, not just an environmental consideration.

What’s Actually Happening

The renewable transition isn’t just technology substitution. Fossil plants run continuously; solar and wind are intermittent. This requires backup systems and storage, making the transition more complex and expensive than most projections suggest.

South Africa’s renewable energy sector is now the largest in Africa and among the top 25 globally by volume demand, expected to grow 50% over the next decade. But this growth is driven more by grid unreliability than climate policy.

What This Means for Business

Small to Medium Businesses: Limited direct impact in the near term unless you’re heavily energy-dependent or choose solar for cost reasons.

Our IT Support Context: We’re seeing increased demand for backup power solutions, UPS systems, and remote monitoring of critical infrastructure. Energy security is becoming an IT infrastructure concern, not just a facilities issue.

The Economic Reality

This transition is happening regardless of individual business preferences. It’s driven by policy decisions, improving renewable technology economics, and in South Africa’s case, grid reliability issues.

The question isn’t whether it’s happening, but how it affects your specific business model and operational requirements.

The Bottom Line

The renewable energy transition is a structural economic shift, not a temporary trend. For South African businesses, it’s primarily about managing energy security and costs rather than environmental compliance.

Understanding the transition helps with strategic planning, but most businesses can adapt incrementally as market conditions and technology costs evolve.

Till next time,
Mpho 🫡