Renewables recently surpassed coal on the global stage, reaching 34.3% of generation ahead of coal's 33.1% (Ember Mid-Year Electricity Insights 2025). What once seemed lofty is now certain: renewables are becoming the major player in ensuring current and future energy needs.
This growth is still very skewed, with the majority of those renewables based in China and India. Countries like South Africa trail behind - coal dominates four - fifths of local electricity generation, while renewables and nuclear account for the rest. But that balance is shifting. For example, Ember reports that solar in SA grew from 1.1% in 2015 to 6.8% in 2023.
In 2025, that percentage is undoubtedly higher, credited to strong growth in power purchasing agreements (PPAs), says John Taylor, head of large C&I and M&A at Yellow Door Energy South Africa.
"Since the Electricity Regulation Amendment Act, there has been a tremendous groundswell of local PPAs, most with private companies looking for stable and affordable electricity. PPAs are leading the way to unlocking energy freedom and security in South Africa."
One year of ERAA
The Electricity Regulation Amendment Act (ERAA), signed into law during August 2024, further opened the market for independent power producers (IPPs). One of its primary impacts was the creation of an open and competitive energy market where IPPs can generate and sell electricity. PPAs have flourished as a result.
South African industry has many enthusiastic PPA customers. Yellow Door Energy (YDE) signed a 24.5-MWp solar PPA with cement manufacturer PPC to supply clean power to four of its plants, to be delivered through solar wheeling. Numerous other IPPs have signed PPAs, providing clean electricity to leading businesses across South Africa.
Corporate South Africa is leading the way, recognising how PPA’s enable them to secure their energy supply, reduce carbon emissions as well as costs, all without any of their own upfront investment (capex). Direct offtakers, such as Vodacom, Southern Sun, and Teraco announced their PPA’s in 2025, underlining how much value ERAA has unlocked. A crucial part of this momentum is that these partnerships reduce the offtakers’ risk of building renewable energy sites.
"When you have a large client for a renewables site, you could say an anchor tenant, it completely reduces the risk of investment on the client’s side as the investment comes from the IPP. Since the site will generate renewable energy at a stable cost, site owners can project future costs and offer energy price guarantees. Large companies are very attracted to that kind of cost predictability and consistent supply. This model is also making it feasible for smaller customers to exploit PPAs through traders such as PowerX, who is working with Yellow Door Energy on a 24.5 MWp PPA in Leeudoringstad," says Taylor.
Creating clean energy partnerships
"PPAs enable a wider base of companies to partner with independent power producers like YDE. They play an important role in enabling the development of energy-producing sites without accruing significant risks such as capital investment costs, and the energy producer can justify those risks through long-term agreements."
It's been just over a year since the Electricity Regulation Amendment Act became law, yet it has already helped transform the South African energy market through PPAs. These agreements offer long-term contractual pathways to develop and produce clean energy.
That is not just a statement or projection. It is a fact reflected by the blossoming local market. Four-fifths of South Africa's energy might still come from coal, but that balance is shifting fast, thanks to ERAA and PPAs.
