South Africa’s electricity market reforms are entering a critical implementation phase with growing concern that delays to key regulatory processes could slow the rollout of the South African Wholesale Electricity Market (SAWEM) and broader power sector reform.
This is according to an update issued by the South African Electricity Traders Association (SAETA) and research firm Krutham following the release earlier this year of the report Policy to power: 10 actions to deliver green, accessible and secure electricity.
According to the briefing, South Africa has largely settled on its electricity reform model through the Electricity Regulation Amendment Act and Eskom’s ongoing unbundling process. However, focus has now shifted towards execution with reform progress described as uneven and some timelines beginning to shift.
Among the key concerns highlighted are delays to electricity trading rules, uncertainty around Eskom’s long-term structure, transmission rollout constraints and institutional capacity shortages within the Department of Electricity and Energy and the National Energy Regulator of South Africa (NERSA).
The rules governing bilateral electricity trading were originally expected to be finalised in April but are now provisionally targeted for July 31 following concerns raised during public consultation processes.
According to SAETA and Krutham, concerns raised during consultation included proposed restrictions on trader participation during SAWEM’s initial phases and limits on third-party electricity supply volumes.
At the same time, NERSA is continuing public consultation processes on the SAWEM Market Code, which is expected to be finalised by July ahead of the planned third quarter 2026 launch of the wholesale market.
The report states that SAWEM will initially facilitate trading between Eskom Generation and Distribution through day-ahead and intraday markets before gradually expanding participation to independent power producers and other market participants from 2027.
Transmission expansion also remains a major concern. According to the update, Eskom delivered 270,8 km of transmission infrastructure against a 423 km target for the 2026 financial year while work continues on mechanisms intended to unlock private investment in transmission infrastructure.
The briefing also points to continued uncertainty around the future structure of Eskom and the establishment of an independent transmission system operator. A high-level proposal from the presidential Eskom Restructuring Task Team is expected in May, followed by a more detailed roadmap in August.
Institutional capacity is identified as another risk area. The Department of Electricity and Energy reportedly continues to face high vacancy rates and an incomplete organisational structure. A 2024 peer review found that NERSA was not adequately prepared for the transition towards a competitive electricity market.
The report identifies 10 priority actions needed to support reform implementation, including finalising the Electricity Pricing Policy, strengthening institutional capacity, accelerating transmission development, improving wheeling frameworks and launching SAWEM with the Market Code in place.
According to SAETA and Krutham, the next phase of reform will depend less on policy direction and more on whether South Africa can execute reforms at the pace and scale required to support investment, energy security and market competition.
