Innovation, Integration, and Transition to Renewable Energy Sources Drive Future Growth Opportunities
South Africa is arguably sub-Saharan Africa’s most developed economy and home to the region’s largest energy sector. However, the country’s chronic energy crisis, most evident from the frequent loadshedding, largely stems from the failure of the national power utility, Eskom, to provide reliable, constant power supply due to its ailing coal-powered fleets and insufficient maintenance of the transmission and distribution network. The poor condition of South Africa’s national T&D network makes it prone to frequent unscheduled breakdowns, theft, and vandalization. The industry is looking at alternative backup power sources, such as diesel-powered generators, to avoid further operational losses. South Africa’s primary need for diesel gensets lies in standby applications for industries and businesses, not prime power use.
The electricity grid is generally stable, with demand linked directly to loadshedding. The country has no direct manufacturing of diesel generators and heavily relies on the import of engines, alternators, or complete gensets from international markets. While population growth, higher living standards, and increased industrial/mining activity drive demand for diesel gensets, alternative technologies such as renewable sources (wind, solar), battery energy storage systems, and gas generators are increasingly popular, restraining the diesel genset market growth. However, alternative distributed energy resources (DER) are, to date, more expensive than diesel gensets and forecast to remain in the next 5 years. There are many opportunities for genset distributors to overcome market restraints through innovative customer services and the ability to adapt and enter new market opportunities.
