A new report highlights the urgent need for structured actions to advance South Africa’s shift from Eskom’s monopoly to a competitive electricity market. Released by the South Africa Electricity Traders Association and produced by Krutham, the document outlines ten key steps amid easing load shedding. It stresses the importance of execution to secure investment and energy security.
South Africa is transitioning from over a century of vertically integrated monopoly control in electricity supply to a competitive, multi-market system, driven by the recent load shedding crisis. The report titled Policy to Power: Ten actions to deliver green, accessible and secure electricity, released this week, argues that reform now requires focused sequencing, accountability, and political commitment rather than just new laws.
At the forefront is the call for a Cabinet-endorsed electricity reform roadmap, featuring clear milestones, deadlines, and assigned responsibilities to prevent fragmentation across government bodies. Existing legislation, including the amended Electricity Regulation Act, already supports a competitive wholesale market, open grid access, and an independent transmission system operator. The South African Wholesale Electricity Market (SAWEM) is set to operate alongside bilateral contracts.
The report emphasizes unbundling Eskom Holdings as the most significant economic reform since 1994, aiming to separate transmission, system operation, and market functions from commercial interests, ensuring nondiscriminatory grid access. It also urges defining Eskom’s future structure, including its capital and generation fleet, which faces replacement for over half of its coal capacity within 15 years.
Private sector activity is already underway, with nearly 4.7GW of projects over 5MW reaching financial close between 2023 and 2025, and 18GW more in the pipeline. Traders are facilitating aggregation, risk management, and financing without state guarantees. However, the report warns that incomplete regulations, such as trading rules and wheeling frameworks, could limit broader participation.
Pricing reforms pose a challenge, as tariffs have outpaced consumer inflation. The pending revised Electricity Pricing Policy (EPP) needs Cabinet approval in 2026 to enable cost-reflective, market-based pricing. Transmission expansion by the National Transmission Company South Africa remains a critical bottleneck, while municipalities managing 40% of the distribution grid require stabilization.
Overall, with load shedding easing and private investment emerging, the report stresses a narrow window to implement these measures for sustainable energy supply, growth, and decarbonization.