SA paves way for competitive electricity market after Nersa approves market operator licence

The National Energy Regulator of South Africa (Nersa) has taken a major step toward reshaping the country’s electricity sector after approving the Market Operator licence for the National Transmission Company South Africa (NTCSA), along with the establishment of the Electricity Market Advisory Forum (EMAF) and the finalisation of Grid Capacity Allocation Rules.

Announced on Friday, the decisions mark a historic milestone as South Africa moves toward a competitive electricity market over the next five years. The reforms follow sweeping changes introduced through amendments to the Electricity Regulation Act of 2006.

Nersa said the Market Operator licence is a critical component in enabling the NTCSA to operate the future competitive electricity market, and forms part of preparations for the forthcoming Market Rules and Market Code.

Under section 34B(3) of the amended Act, the Market Operator must now submit the Trading Platform, Market Rules and Market Code for regulatory approval.

"The Electricity Market Advisory Forum (EMAF), approved on29 April 2025, will play a vital role in advising the Energy Regulator on the finalisation and implementation of these regulatory instruments, as well as providing guidance on key enablers required to establish a competitive electricity market," Nersa said.

"The EMAF will also support regulatory oversight of market operations, ensuring readiness andinclusivity among stakeholders as the electricity market evolves. NERSA will communicate the potential launch date of the EMAF in due course, once all 14 nominated members approved by the Energy Regulator on 27 November 2025, have been informed." 

Nersa described the forum as a proactive mechanism to ensure that market development is inclusive and transparent, with stakeholders helping shape a robust regulatory environment. This includes oversight of the NTCSA’s activities as Market Operator and assisting with the approval of draft Market Rules and the Market Code.

The NTCSA also confirmed that it has received approval from Nersa of its Market Operator Licence application, marking an important step toward establishing a fair, competitive market for electricity in South Africa.

Monde Bala, CEO of the NTCSA, said the approval of the licence enables further progress toward a transparent, non-discriminatory trading environment that allows a wider range of participants to compete on equal terms.

“This is a significant milestone for South Africa’s evolving electricity sector. A competitive market will unlock economic and societal benefits over time by broadening participation, stimulating investment in new capacity, and enhancing long-term system resilience. We welcome also the creation of the Electricity Market Advisory Forum (EMAF) and the Grid Capacity Allocation rules," Bala said. 

“Our team has undertaken extensive engagement on the Market Code with stakeholders across the sector. With the Market Operator now licenced, the next step is to finalise the Market Code and submit it to Nersa for its consideration and approval, thereby establishing a clear and stable rules framework for the operation of the future electricity market." 

With extensive preparatory work already completed, the NTCSA said it will now focus on finalising the Market Code for submission to Nersa, who makes the final decision on approval.

The NTCSA has ensured the proposed Market Code reflects broad stakeholder input and supports the transition to a competitive marketplace.

It said it will await the licence conditions and reason for decision and will submit any further information required by Nersa relating to potential conflicts of interest and independence within the context of the market development roadmap. 

Meanwhile, in a separate but related development, Nersa confirmed that on 12 November it approved new Grid Capacity Allocation Rules, designed to ensure fair and non-discriminatory access to South Africa’s constrained transmission grid.

The rules aim to prevent inactive projects from holding capacity, improve planning certainty for developers, optimise use of existing infrastructure and guide future investments.

Nersa said the reforms will accelerate access for bankable energy projects, reduce application backlogs, strengthen queue management and boost investor confidence—all essential factors in stabilising and modernising South Africa’s electricity system.

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