Published: 20 October 2026
The data centre boom is an energy story before it’s an infrastructure story
South African data centre power demand is set to nearly double by 2029. Where that power comes from will decide who can build, who can scale and who spends years waiting on grid capacity
Site selection for a new data centre used to start with fibre routes, land and proximity to customers. Increasingly, it starts with a different question: can this site access the power it needs, on the timeline the business case requires? For an industry where uptime IS the product, it’s the requirement everything else is designed around.
Demand is growing faster than the grid connection process can absorb
According to the Development Bank of Southern Africa, South Africa’s installed data centre IT load capacity is projected to grow from 435 MW in 2024 to 829 MW by 2029, a compound annual growth rate of around 17.5%. Capital investment in the sector is projected to rise from over 39 billion rand in 2023 to around 68 billion rand by 2029. To support that growth, the study estimates the country will need four to five new regional data centres and 20 to 30 edge facilities in underserved areas by 2029.
Reporting on announced data centre operator expansion plans and growing cloud and AI operations from Microsoft and Amazon Web Services, suggests these projects alone could add close to 1,000 MW of new demand, more than doubling current consumption. To put a single facility’s scale in perspective: the International Energy Agency notes that a typical AI-focused data centre already consumes as much electricity as 100,000 households, and the largest facilities now under construction globally will consume around 20 times that.
That demand isn’t only compute. Cooling and other overhead systems already account for a large share of a data centre’s total power draw: the Uptime Institute’s 2025 global survey put the average power usage effectiveness ratio at 1.54, meaning that for every unit of energy reaching the servers, another roughly half a unit goes to cooling, power distribution and other overhead. South Africa’s climate makes that worse rather than better. High ambient temperatures limit how much of the year a facility can rely on outside air for free cooling, pushing operators toward more energy-intensive mechanical cooling systems for the rest of the year. Teraco, for example, has had to double cooling capacity at its Isando facility to 2 MW per data hall, even with free cooling available for around 65% of the year.
That is a lot of new load to add to a grid where grid connection queues and transmission capacity remain a live constraint on how quickly new large loads can be brought online. South Africa remains roughly 85% reliant on coal for its electricity, with an ageing generation fleet, and government has openly encouraged data centre operators to reduce their reliance on the grid and “self-provision” their own energy.
Why an aggregated renewable portfolio fits data centre load
A data centre’s power profile is about as close to constant, always-on demand as any industrial load gets. That makes the case for renewable energy less about matching output to a single facility’s variable needs, and more about diversification: sourcing electricity from a portfolio of wind, solar and battery energy storage assets spread across different regions and technologies reduces exposure to any single site’s weather patterns or maintenance downtime, in a way that one embedded solar plant on its own cannot. Layered onto a long-term energy supply agreement, that diversified supply gives operators price certainty over a horizon that matches the lifespan of the infrastructure they’re building, while easing pressure on the constrained grid connections that are increasingly the real bottleneck to growth.
Why data centre operators choose NOA
That combination of on-site solar and wheeled portfolio power is already playing out with Teraco, Africa’s largest data centre operator. NOA and Teraco have signed an energy supply agreement under which NOA wheels wind-powered renewable energy from its national portfolio to complement the 120 MW solar plant Teraco is building in the Free State. The pairing is deliberate: wind tends to generate strongest overnight, solar during the day, so combining the two gives Teraco’s always-on data centres broader renewable coverage across a full 24/7/365 operating cycle than either technology could deliver alone. The agreement is structured with flexibility for both parties to expand renewable offtake as Teraco’s demand grows.
“NOA is proud to deliver renewable energy products supporting Africa’s largest data centre operator’s ambitious goals,” says Karel Cornelissen, Group CEO of NOA. Bryce Allan, Head of Sustainability at Teraco, frames the deal in terms of the company’s broader trajectory toward its 100% renewable energy goal: “This energy supply agreement supports our sustainable growth pathway. We appreciate NOA’s collaborative approach in complementing our renewable energy supply.” Teraco CEO Jan Hnizdo has similarly pointed to the wider grid benefit of the arrangement, noting the company is “looking forward to these wind generation facilities coming online and adding renewable energy production to South Africa’s grid.”
The Teraco structure, wind layered onto a customer’s own solar build, reflects what that customer already had in place, not the standard shape of a NOA agreement. Most data centre operators don’t bring generation assets of their own to the table, and don’t need to: NOA’s own blended national fleet, spanning wind, solar and battery energy storage across multiple regions, is built to supply the full mix directly. What changes from one customer to the next isn’t the underlying portfolio, it’s how the agreement is structured around it, matched to a customer’s load profile, layered in around whatever generation a customer already owns, and adjusted as demand grows. For Teraco, that meant supplying the one technology its own build didn’t already cover. For most data centre operators, it means NOA’s blended fleet doing the job end to end.
Given how directly uptime and growth plans depend on power supply in this sector, the choice of energy partner deserves more scrutiny than a tariff comparison. We’ve set out the criteria worth applying, including portfolio diversity, generation depth, financial strength and execution capability, in How to choose a credible energy partner.
The next five years will be decided by power, not just fibre
Almost doubling installed capacity in five years is an extraordinary growth curve for any infrastructure sector to sustain on grid supply alone. The operators already moving on renewable procurement aren’t doing so as a sustainability statement, they’re doing it because it’s increasingly the only way to guarantee the power a growth plan like this needs.
About the author
Christine Krone is Head of Marketing at NOA, bringing more than 20 years’ experience in technical and B2B marketing across renewable energy, financial services, higher education and consulting. She is passionate about demystifying complex industries and translating technical solutions into clear, compelling information that can help businesses make informed energy decisions.
References
Development Bank of Southern Africa, Digital Infrastructure Investment Study 2025, as reported by ITWeb; household/AI power consumption comparison from the International Energy Agency, cited in the same article
Daily Maverick, Major SA data centre expansion plans emerge, set to more than double current power demand, 9 February 2026
Data Center Dynamics, Teraco starts work on 120 MW solar farm to power South African data centers, including the government commentary on self-provisioning and the Africa Data Centres power purchase agreement figure
Uptime Institute, 2025 Global Data Center Survey, as reported by mgrid, for the global average power usage effectiveness figure of 1.54
Data Center Dynamics, Feeling the heat, for South Africa’s climate-driven cooling constraints and Teraco’s Isando cooling capacity
