South African businesses may have moved beyond severe loadshedding, but rising electricity tariffs and infrastructure risks are creating a new energy challenge for supply chains.
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South African businesses may have moved beyond the worst periods of loadshedding, but energy uncertainty remains a major challenge as rising electricity tariffs and infrastructure pressures continue to reshape supply chain decisions.
For procurement and supply chain leaders, the focus in 2026 has shifted from simply keeping operations running during power cuts to managing the wider impact of higher energy costs, network disruptions and long term reliability concerns.
The National Energy Regulator of South Africa (NERSA) approved electricity tariff increases of 8.76% for Eskom direct customers and 9.01% for municipal customers for the 2026/27 financial year, placing further pressure on businesses already dealing with rising operational and logistics expenses.
Paul Vos, Regional Managing Director of the Chartered Institute of Procurement & Supply (CIPS) Southern Africa, said the nature of energy risk has changed.
“Energy uncertainty has not disappeared; it has evolved,” Vos said.
“Today, organisations are increasingly dealing with infrastructure failures, maintenance backlogs and localised network disruptions, particularly at municipal level, that are often less predictable than loadshedding itself. From a supply chain perspective, unpredictability creates significant operational risk.”
The impact is being felt throughout supplier networks as businesses face rising electricity costs alongside higher transport and logistics expenses.
“This creates a double cost pressure,” Vos said.
“Suppliers are facing higher energy costs and higher logistics costs simultaneously. As a result, procurement teams are seeing greater pricing volatility, more requests for contract adjustments and increased pressure on budgets.”
Energy intensive sectors including manufacturing, food production, cold chain logistics, mining, chemicals and water infrastructure remain among the most exposed industries due to their dependence on reliable and affordable power.
While many manufacturers have attempted to absorb higher costs through efficiency improvements, there are limits to how much pressure businesses can carry before costs move through the wider economy.
“We continue to see gradual price increases across a range of products and services,” Vos said. “Ultimately, a significant portion of energy related cost escalation finds its way to customers and consumers.”
The changing energy landscape is also forcing companies to rethink procurement strategies, with greater emphasis being placed on resilience rather than cost alone.
Businesses are increasingly diversifying suppliers, exploring regional sourcing options, strengthening supplier relationships and using scenario planning to prepare for possible disruptions.
“Procurement is shifting from a transactional function to a resilience enabler,” Vos said. “Energy risk is increasingly being built into supplier selection and sourcing decisions, alongside traditional supplier evaluation criteria such as quality, delivery and price.”
Renewable energy solutions are becoming an increasingly important part of business continuity planning as companies look for greater control over energy costs and supply.
Businesses are exploring options including power purchase agreements, embedded solar generation, battery storage and hybrid energy systems.
“The conversation around renewable energy has changed,” Vos said. “For many organisations, it is no longer primarily a sustainability initiative. It is a business continuity and resilience strategy.”
Contract management is also becoming more important as companies and suppliers navigate a more volatile environment.
Vos said procurement agreements need to reflect changing conditions through tools such as energy linked escalation clauses, agreed pricing thresholds, open book costing models, risk sharing mechanisms and structured review periods.
“The objective is to ensure that risk is allocated fairly and managed transparently across the supply chain,” he said.
Looking ahead, CIPS Southern Africa believes businesses need to treat energy risk as a strategic issue requiring coordination between procurement, finance and operations teams.
Short term measures include assessing energy exposure across supplier networks, identifying vulnerable categories and strengthening engagement with suppliers.
Long term strategies will require businesses to embed energy considerations into sourcing decisions, supplier partnerships and broader operational planning.
“Energy is no longer simply a facilities issue,” Vos said. “It has become a core supply chain risk that requires coordinated leadership across procurement, finance and operations.”
As South Africa’s energy challenges continue to evolve, businesses that build resilience into their supply chains will be better positioned to manage rising costs, protect operations and adapt to a changing economic environment.
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