South Africa’s IRP 2025 envisages R2.2 trillion in investment and 105 GW of new generation capacity by 2039, including 16 GW of gas and up to 10 GW of nuclear.
Meridian Economics found that the program’s own reference case modeling did not select for new nuclear capacity. A nuclear scenario was only achievable by removing the gas as an option after 2030.
Eskom’s aging coal fleet faces a major wave of retirement within four to five years.
South Africa’s Minister of Power and Energy, Kgosiensho Ramogopa, said the country’s Integrated Resource Plan (IRP), which is due to be approved by cabinet in 2025, is a “government policy” rather than a “wish list”. The plan targets more than 105GW of new power generation capacity by 2039, supported by 16GW of imported LNG gas and a potential nuclear expansion of up to 10GW, expected to cost R2.2 trillion.
Dr Grove Stein, managing director of Meridian Economics, said these headline numbers were not determined by the government’s own technical modeling.
What I learned from modeling
Meridian’s analysis of the IRP modeling process, published in May 2025, revealed a structural disconnect between the government’s analytical work and the final recommendations. IRP’s optimized reference case incorporates 6 GW of gas power procurement already committed and finds wind, solar, gas and storage to be the preferred technologies. Meridian notes that no new nuclear capacity was selected in the reference case, and the results are consistent with other published modeling studies on South Africa’s electricity system.
In a further scenario where gas is not pre-commissioned, the government’s own optimizers have selected only 3.5 GW of combined cycle gas turbine capacity from 2031 to 2035. IRP’s proposed balance plan provides for 16 GW.
Nuclear assignments show a more pronounced discrepancy. A review of IRP modeling by Meridian found that the only way a nuclear scenario could be constructed was to completely remove available gas capacity as an option beyond 2030. The proposed balance plan then combines both large-scale gas build-up and nuclear power, a combination that Meridian describes as “logically inconsistent with the IRP’s own analysis” which would be extremely expensive and replaced by cheaper renewable energy-based options.
“The typical pattern for government IRPs is that the modeling results are not that different from what we got in our modeling,” Steyn told Energy Capital & Power. “But then politicians tell us that the final recommendations are not properly modeled solutions. They just pick and choose bits and pieces of what they like and throw them into one pot.”
Meridian’s criticism extends to the IRP document itself. The company points out that the published plan does not include cost or emissions data for the proposed balance plan, making it virtually impossible to independently verify the impact on electricity prices and consumers.
coal retirement gap
Some observers have concluded that near-term capacity risks have eased as South Africa moved from chronic load shedding to relative surplus for about 18 months. Stein warns against such a reading.
Most of Eskom’s coal-fired power stations were commissioned between the 1970s and 1990s and are facing a wave of structural exits within the next four to five years. These plants also do not comply with South Africa’s minimum emissions standards and are operated under ministerial exemptions which cannot continue indefinitely. Retrofitting them to bring them into compliance would cost tens to hundreds of billions of rands, making it economically difficult to justify their continued operation.
Meridian modeling predicts that South Africa will face new load shedding by the end of this decade unless the right generation mix is built to fill the capacity gap created by the retirement of coal. “We can go from load shedding to what appears to be excess capacity within a year and a half,” Steyn says. “That’s a very rapid change.”
IRP mismatch creates uncertainty for investors
The IRP serves as the primary signal for capital allocation in South Africa’s energy sector. Procurement programmes, IPP bid lines and long-term PPA structures will be aligned with the plan’s provisions. If generational composition reflects political bargaining rather than least-cost modeling, the investment signals generated may be unreliable.
Technologies specified as uneconomic in the plan, especially large-scale gas and nuclear, would be publicly procured with limited competition, and government balance sheets would absorb much of the risk and cost. Meridian points to recent experiences with the Medupi and Kusile coal megaprojects in South Africa, and the RMIPPP car powership controversy, as precedents for what happens when public energy procurement is advanced without sufficient analytical basis.
Stein also points to the institutional risk environment as a compounding factor. “Eskom remains an unintegrated monopoly with a track record of abusing its dominance,” he said. “The regulatory framework is weak and policy reforms are still debated within the government and ruling party. People need to start paying more attention to this issue.”
