Electricity Regulation Amendment Act opens path to competitive power market

South Africa's Electricity Regulation Amendment Act, signed by President Cyril Ramaphosa in August 2024 and in force from 1 January 2025, is the legal foundation for ending Eskom's monopoly as the sole bulk supplier of power. For the mining industry, a major consumer of electricity, it opens the way to buying power through a market rather than relying only on regulated Eskom tariffs.

Key provisions

The Act provides for a Transmission System Operator, which must be established as an independent entity within five years, with the National Transmission Company of South Africa acting in that role in the interim. It creates market operation as a new activity licensed by Nersa and requires a Market Code to govern competitive trading. It obliges the system operator not to discriminate between generators or customers in dispatch and requires access to transmission and distribution networks to be objective, transparent and non-discriminatory.

On pricing, the Act distinguishes between tariffs that Nersa must set or approve, such as network charges, and prices agreed under direct supply agreements or produced by a competitive market. It also imposes heavier penalties for damage to and sabotage of electricity infrastructure.

Caveats

Lawyers have flagged that the narrow definition of direct supply agreements could require Nersa approval for some trader contracts, and definitions relating to municipal reticulation were held back following objections from the South African Local Government Association.

What followed

Nersa granted NTCSA a market operator licence in December 2025, and the South African Wholesale Electricity Market, delayed from 1 April 2026, is scheduled to open in the third quarter of 2026. Nersa has also been consulting on trading rules and wheeling charges. Private procurement is already reshaping supply: all ten privately procured projects that reached commercial operation in the first half of 2026 sell to mining or industrial offtakers, according to a Power Futures Lab briefing reported by ESI Africa.

Sources

• The Presidency: President Ramaphosa assents to Electricity Regulation Amendment Bill, 16 Aug 2024
• Mail & Guardian: New Electricity Regulation Amendment Act welcome but potential hurdles remain, 28 Jan 2025
• Energy News Network: South Africa's wholesale electricity market is due to open before the end of September, 03 Aug 2026
• ESI Africa: Private generation procurement for wheeling and energy trade, 24 Aug 2026

Photo: High-voltage transmission lines in South Africa. Photograph by Mike Peel (www.mikepeel.net)., Wikimedia Commons, CC BY-SA 4.0.