South Africa’s electricity sector is entering a decisive phase. Trading rules are being finalised, public hearings are scheduled and the policy intent behind the Electricity Regulation Amendment Act is clear: the system is meant to move away from a vertically integrated monopoly towards a competitive, rules-based electricity market, says Chris Yelland, MD of EE Business Intelligence.
Against this backdrop, Eskom’s handling of its legal challenge against the National Energy Regulator of South Africa (NERSA) about electricity trading licences raises troubling questions about regulatory certainty, institutional alignment and trust.
For months, Eskom’s public narrative has been that it has “paused” or “stayed” its High Court review application challenging NERSA’s decision to grant electricity trading licences to five private companies. That message, conveyed publicly in late September, was widely interpreted as a signal that Eskom was stepping back from litigation in favour of engaging constructively in the regulator-led process to develop trading rules.
However, court records tell a different story.
A directive issued by the Gauteng High Court on October 31 records, in unambiguous terms, that Eskom confirmed to the court that it is proceeding with its review application. The directive sets out active procedural steps including responses to interlocutory notices, the preparation of confidentiality agreements and the imminent production of the Rule 53 record by NERSA. These are not the actions of a matter held in abeyance.
This apparent disconnect between Eskom’s public assurances and its litigation posture matters far beyond the legal technicalities of what constitutes a “stay”. In South African law, a stayed matter does not progress. Deadlines pause. Procedural steps halt. That is not what the court record reflects.
The issue is not simply semantic. It goes to the heart of credibility at a moment when confidence in the reform process is essential.
Electricity trading licences are a foundational element of the emerging market structure. They underpin wheeling arrangements, private power purchase agreements and the ability of traders to aggregate supply and demand across generators and offtakers. Prolonged legal uncertainty about the validity of these licences has real-world consequences: delayed investment decisions, stalled financial close on projects and hesitation among counterparties who require regulatory clarity before committing capital.
Eskom has argued that it was compelled to proceed with the case after trader respondents allegedly refused to agree to a stay. However, some traders have disputed this account, stating that they were never approached to agree to a stay and that the court was never asked to order one. Whatever the merits of these competing claims, the outcome is the same: the litigation is alive, active and progressing.
This places Eskom in an uncomfortable position. On the one hand, it is publicly aligned with government’s stated commitment to electricity market reform, competition and the development of transparent trading rules. On the other, it is pursuing a legal challenge that, if successful or simply prolonged, could materially delay or weaken the very market arrangements those reforms seek to establish.
This tension was recognised by the Minister of Electricity and Energy who, in 2025, publicly urged Eskom to exercise restraint and allow the regulatory process to unfold without being overshadowed by court action. The Minister’s position reflected a broader policy concern: that reform cannot succeed if it is continually destabilised by litigation from within the state’s own electricity institutions.
Eskom is not an ordinary market participant. As a state-owned company, and as a central pillar of the electricity system even in an unbundled environment, it carries a heightened responsibility to act in a manner that supports policy coherence, regulatory certainty and investor confidence.
That does not mean Eskom must abandon its legal rights. But it does mean that, when Eskom communicates publicly about its intentions, those statements must align with its actions in court. Divergence between the two undermines trust – not only in Eskom but in the reform process as a whole.
With public hearings on electricity trading rules scheduled for later in January 2026, the sector needs clarity not mixed signals. Market participants need to know whether the rules being developed will operate in a stable legal environment or whether they remain subject to a lingering legal overhang that could be activated if outcomes prove unfavourable to incumbent interests.
Electricity market reform is already complex, politically sensitive and technically demanding. It does not need additional uncertainty created by contradictory messaging from the system’s most powerful player.
If South Africa is serious about building a competitive electricity market, institutional alignment is not optional. It is foundational.
