# BizTrends2026 | KD Strategie Kalnisha Singh : The pressure is on for South Africa energy sector

bizcommunity.com · Feb 23, 2026 · Collected from GDELT

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If 2023 and 2024 were defined by urgency, and 2025 by acceleration, then 2026 will be defined by pressure.Image supplied.South Africa’s energy sector is not slowing down.Private generation continues to expand.Battery storage is scaling.Mining exploration is picking up again in several provinces.Capital remains interested.Infrastructure delivery remains a national priority, reinforced in the recent State of the Nation Address (Sona).But the system in which these projects operate is tightening.The coming year will not be defined by megawatts alone.It will be shaped by municipal elections, stressed local government finances, grid constraints, water insecurity, regulatory interpretation around B-BBEE and local development mandates, and growing competition for land use rights.Energy infrastructure is increasingly embedded in a broader economic and political ecosystem.That ecosystem is under strain.Municipal elections and rising local scrutinyThe 2026 municipal elections will sharpen local political dynamics across the country.Energy projects often sit at the centre of local debates around jobs, procurement, land and development.In election cycles, community expectations intensify.Local leadership changes.Commitments made during development phases may be revisited.Procurement and employment statistics are examined more closely.Projects may find themselves drawn into broader conversations about service delivery and municipal performance.This does not mean hostility towards energy investment.It does mean that stakeholder engagement will need to be steady, structured and politically aware.The margin for misalignment between what was promised and what is delivered will narrow.The shifting economics of electricity and municipal viabilityOne of the most under-discussed structural shifts in the sector is the impact of private generation on municipal revenue models.Electricity sales have historically formed a substantial portion of municipal income.As large users move to embedded or privately generated supply, municipal revenues decline while infrastructure maintenance obligations remain.Distribution networks still need upgrades.Water systems still need repair. Roads and services still require funding.This creates tension.In 2026, developers can expect more complex negotiations around wheeling agreements, tariffs and infrastructure contributions.Grid access discussions will increasingly intersect with questions of municipal financial sustainability.Where municipalities are fiscally strained, administrative delays and coordination challenges may intensify.Energy projects are no longer operating adjacent to municipal systems. They are operating within them.#BizTrends2026 | Webber Wentzel team: South Africa’s energy outlookJason van der Poel, Kiera Bracher, Sabeeha Loonat and Junaid Nyker 14 Jan 2026Grid constraints and infrastructure sequencingTransmission expansion remains underway, but grid constraints continue to shape project viability in several regions.Storage provides flexibility, but it does not eliminate the need for coordinated planning between Eskom, municipalities and developers.As more projects enter the pipeline, competition for grid capacity becomes sharper.Infrastructure upgrades may require shared funding models and longer timelines.Developers should anticipate more rigorous interrogation of grid integration assumptions, particularly in high-demand corridors.The grid is not only an engineering interface.It reflects institutional capacity, capital allocation and governance realities.Water insecurity as an operational riskThe water crisis is no longer peripheral to electricity generation.In water-stressed municipalities, ageing infrastructure and supply instability are affecting industrial users, including energy facilities.Construction water requirements, cooling systems, dust suppression and associated industrial processes all depend on reliable supply.Where municipal water systems are compromised, operational risk increases.In 2026, water use planning will come under closer scrutiny.Projects operating alongside mining or other water-intensive activities will need to assess cumulative impact more carefully.The energy-water nexus is becoming operationally significant.Regulatory interpretation and developmental mandatesSouth Africa’s compliance ecosystem remains dense and evolving.Environmental authorisations, labour legislation, local procurement requirements and B-BBEE obligations all intersect in energy and mining projects.What is becoming more challenging is regulatory interpretation.Different stakeholders – regulators, lenders, municipalities and communities – may hold varying expectations regarding local ownership structures, enterprise development commitments and reporting standards.In some instances, guidance lacks uniformity. In others, enforcement is becoming more assertive.For sponsors, this creates a need for internal coherence.Developmental commitments cannot sit as standalone documentation prepared for bid submission.They must be embedded into procurement systems, HR practices, governance structures and reporting frameworks.Where alignment is weak, reputational and operational exposure increases.Competing for land in a crowded development landscapeRenewable energy expansion and renewed mining exploration are increasingly overlapping geographically.Agricultural land, communal land and resource-rich regions are attracting multiple forms of interest.This intensifies negotiations around land use rights, environmental approvals and community benefit structures.Traditional leadership institutions, municipalities and landowners are navigating multiple developers simultaneously.Lead times may extend.Engagement processes may become more layered.Projects that enter development assuming uncontested access may find the landscape more complex than anticipated.Sona priorities and delivery expectationsThe recent State of the Nation Address reaffirmed energy security, infrastructure expansion and industrial development as national imperatives.These commitments reinforce the sector’s strategic importance.They also elevate expectations.If energy is positioned as foundational to economic growth, then project-level delivery will be scrutinised not only for technical performance, but for developmental contribution.Job creation, local participation and transformation outcomes will remain part of the conversation.A more demanding, interconnected systemThe defining feature of 2026 is convergence.Municipal elections intensify local politics.Private generation reshapes municipal revenue.Grid infrastructure requires coordination.Water insecurity affects operations.Regulatory interpretation around transformation remains complex.Mining exploration reactivates in overlapping regions.Energy projects now operate within this interconnected system.Technical capability remains essential.Financial structuring remains critical.Alongside these, institutional intelligence and operational integration are becoming decisive advantages.The opportunity in the sector remains substantial.Capacity is being added.Investment continues.The contribution to economic stability is clear.The operating environment, however, is becoming more demanding.In 2026, the projects that will succeed are those that recognise that energy infrastructure is no longer a standalone asset class.It is part of a broader socio-economic system under pressure.Navigating that system with coherence, credibility and foresight will separate resilient operators from reactive ones.