South Africa's electricity market transformation: NERSA approves key regulatory changes
Key steps have been taken by the National Energy Regulator of South Africa (NERSA) to reshape the country's electricity landscape.
Image: Eskom
Key steps have been taken by the National Energy Regulator of South Africa (NERSA) towards creating a competitive electricity market over the next five years.
NERSA announced that it had approved the Market Operator licence for the National Transmission Company South Africa (NTCSA) as part of a series of regulatory decisions aimed at reshaping the country’s energy landscape under the amended Electricity Regulation Act of 2006. It is hoped that these changes in the future may bring about lower electricity prices for consumers.
Developments in the Electricity Market
Alongside the licensing decision, the Energy Regulator endorsed the establishment of the Electricity Market Advisory Forum (EMAF) and adopted new Grid Capacity Allocation Rules. These developments collectively form the foundation for a gradual transition from a vertically integrated system toward a rules-based, open marketplace that allows broader participation in electricity trading.
The Market Operator licence formally authorises the NTCSA to administer the future electricity market platform and finalise the Market Code and Market Rules, which will govern how electricity is traded once the market is operational. According to NERSA, the licence is a “key activity” for establishing the structures needed to support market operations over the next five years.
Stakeholder Reactions
Monde Bala, CEO of the NTCSA, said the approval represents “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.”
He said the NTCSA had already conducted extensive engagement with stakeholders on the Market Code.
“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,” he said.
Eskom also welcomed the decision, describing it as a key milestone in the restructuring of the electricity supply industry.
Eskom Group Chief Executive Dan Marokane said the approval “aligns with global best practice, supports a level playing field for market participation and enhances certainty for investors looking to bring new capacity into the system.”
Marokane added that the publication of the new grid allocation rules and the establishment of the EMAF “sends a strong signal to investors that the country remains committed to a rules-based transition to a competitive marketplace.”
Future Outlook
NERSA said the EMAF will play a central advisory role in the finalisation of the Market Code and in ensuring regulatory oversight of market operations. The forum’s launch date will be communicated once all nominated members have been informed.
The regulator noted that the newly adopted Grid Capacity Allocation Rules aim to ensure fair, transparent, and non-discriminatory access to limited grid capacity, prevent inactive projects from blocking development, and improve planning certainty for investors.
According to NERSA, the reforms are expected to accelerate access for bankable projects, reduce backlogs, and boost investor confidence as South Africa prepares for a more open electricity market.