South Africa’s plans to expand fossil gas and liquefied natural gas (LNG) are being promoted as a way to address energy shortages, support industry and strengthen energy security. A new case study challenges this approach, highlighting the financial risks of gas infrastructure, rising electricity costs and the availability of cheaper renewable energy alternatives.

Published in September 2026 by Recourse, the report examines the economic and development implications of South Africa’s planned gas-to-power projects and LNG import infrastructure.

Key findings include:

• High financial risks: South Africa faces mounting public debt, while planned gas projects require significant investment and expose the country to currency fluctuations, volatile international fuel prices and stranded assets.

• Gas is becoming more expensive: Research cited in the report found that gas, which was 50% cheaper than renewables in 2012, had become almost three times more expensive by 2021. Renewables paired with battery storage offer a cheaper alternative for meeting electricity demand.

• Limited investment appetite: Major gas projects face financing challenges, legal setbacks and uncertainty over fuel supply. The proposed Richards Bay power plant has also faced environmental approval challenges, while the Zululand LNG terminal has yet to reach a final investment decision.

• Higher costs for consumers: Dollar-priced LNG exposes South Africa to exchange-rate risks, potentially increasing electricity tariffs. With around 45% of households experiencing energy poverty, further price increases would disproportionately affect lower-income communities.

• Risks to jobs and industry: Gas expansion risks diverting public and private investment from renewable energy, storage and industrial electrification. The report argues for a managed transition to protect workers and develop new employment opportunities.

• Renewable energy offers a better alternative: South Africa’s 2025 Integrated Resource Plan allocates 34 GW to wind, 25 GW to solar and 8.5 GW to battery storage. These technologies offer opportunities to strengthen energy security, reduce fuel import dependence and support a more affordable transition.

The case study argues that South Africa should reconsider its planned gas expansion and prioritise renewable energy, battery storage, transmission infrastructure and industrial electrification. Rather than locking the country into expensive imported gas, investment should support an affordable energy transition, protect vulnerable households and create sustainable economic opportunities.