How the AI era is reshaping South Africa’s data centres

A common myth suggests data centres can run on rooftop solar. In reality, on-site panels barely cover office lights. To power the actual IT load sustainably, South African operators use electricity wheeling. They invest in utility-scale wind and solar farms in the hinterlands, feed that energy into the national grid, and off-take an equivalent amount at the facility.

Leading the charge, Teraco has committed a massive R2-billion to build its own 120MW utility-scale solar farm in the Free State, while competitors like ADC and Vantage are securing long-term power purchase agreements to buy diverse renewable supply.

However, the renewables arithmetic is unforgiving. A 120MW solar plant does not equal 100% green power because the sun doesn’t always shine. Even massive utility-scale projects currently only cover roughly 30% to 50% of a facility’s total critical load. The paradox remains: while the industry is frantically building renewable capacity to offset its carbon footprint, the always-on demands of AI mean they must still balance these new green electrons with the steady, fossil-fuelled baseload of the national grid to ensure reliability.

DM How datacentres work
(Source: Daily Maverick)
Industrial evolution
Because the national grid can be unreliable, local infrastructure must be a customised blend of solar, batteries and huge back-up generators to keep to the uptime commitments. This brownfield strategy of gutting and converting existing industrial warehouses has turned specialised real estate into a high-stakes game, with single plots in Cape Town now fetching upwards of R550-million (what Africa Data Centres paid for its CPT-1 facility).

As South Africa hosts more of these AI factories, the economics are shifting. Individual components like network switches are becoming 30% more efficient, but our demand for AI processing keeps total energy consumption climbing. The goal is a delicate balance: securing permits, wheeling renewable power to offset coal and managing water with clinical obsession