Aurora’s first-ever long-term forecast for South Africa projects more than 120GW of new capacity by 2060 and more zero-price hours as coal retires and renewables expand.
Aurora Energy Research, the leading global provider of long-term bankable power price forecasts, has launched its inaugural long-term forecast for the South African power market, providing investors, developers and market participants with a forward-looking view of power prices ahead of the anticipated launch of the South African Wholesale Electricity Market (SAWEM) in 2027.
Aurora’s Central forecast projects a fundamental transformation of South Africa’s power sector over the coming decades. Demand is forecast to project a 1.3% annual growth between 2027 and 2060, with residential and commercial demand offsetting a stagnant industrial base. Over 30 GW of aging coal-fired generation will retire over the same time period. As a result, more than 120 GW of new generation capacity is needed by 2060, driven primarily by solar PV and onshore wind. South Africa’s generation mix shifts away from coal towards a system dominated by renewable energy, supported by flexible generation.
The forecast shows the share of electricity generated by wind and solar rising from 23% in 2027 to 88% by 2060. Coal-fired capacity will retire slower than currently scheduled to avoid economically damaging levels of load-shedding in the early 2030s.; Storage technologies, diesel, gas peaking and new combined-cycle gas turbines (CCGTs) are expected to provide critical dispatchable generation during periods of low renewable output, accounting for around 7% of total generation by 2060.
Aurora also projects significant changes in market pricing dynamics. Baseload power prices increase towards 2050, driven by growing electricity demand, rising commodity prices and the gradual removal of carbon tax exemptions in the power sector. Solar PV and onshore wind capture prices are forecast to rise by more than 100% between now and 2060 as a result, a clear signal to developers and investors.
The forecast comes at a pivotal moment for South Africa’s electricity sector. As private generation continues to accelerate and preparations for SAWEM gather pace, investors face an evolving landscape of both opportunities and risks.
Caroline Still, South Africa Market Lead at Aurora Energy Research, comments: “A well-functioning spot market is a force for good. Transparent, market-based pricing and a credible benchmark for negotiations are exactly what deepen liquidity, unlock finance and move isolated deals towards genuine market scale.”
Dan Monzani, Managing Director, UK, Ireland and Africa, adds: The market fundamentally changes shape. Coal phases out and renewables reach 85-90% of generation. Average prices rise into the 2050s, but the real story is a widening distribution, with far more high-price hours and far more zero-price hours.
“Volatility is the opportunity. Understanding these risks, where your exposure sits, and how you structure around cannibalisation, curtailment and balancing is what will separate the winners from the losers in this market.”
The authors of the study will present detailed findings during the upcoming public webinar “Route to Market: Aurora’s first Central forecast for the South African power market”, scheduled for August 13, 2026. 10:00 am, BST: Webinar Registration – Zoom.