South Africa’s electricity reform programme is entering a decisive implementation phase, with policymakers, regulators and industry stakeholders now focused on execution rather than policy direction alone.
This is according to an updated briefing note released by the South African Electricity Traders Association (SAETA) and research firm Krutham, following the publication earlier this year of the report, Policy to Power: Ten Actions to Deliver Green, Accessible and Secure Electricity. The report argues that South Africa has largely settled on its electricity reform model, but the success of the transition will depend on whether the country can implement reforms at the pace and scale required to ensure energy security, affordability and long-term economic growth. At the centre of the transition is Eskom’s unbundling process and the move toward a competitive multi-market electricity system. The reforms aim to create an electricity market where multiple generators, traders and distributors can participate through bilateral transactions and the future South African Wholesale Electricity Market (SAWEM). According to SAETA and Krutham, the legislative and policy framework required to support the transition is largely in place through the Energy Action Plan and the Electricity Regulation Amendment Act of 2025. However, uneven implementation and shifting timelines continue to present challenges. Download the report here.Key reform milestones under scrutiny
Several major policy and regulatory developments are expected over the coming months, including the release of the revised Electricity Pricing Policy, progress on Eskom’s restructuring and the finalisation of market trading rules. Among the key developments highlighted in the briefing note are:- The Department of Electricity and Energy is expected to submit an electricity reform roadmap to Cabinet before it enters public consultation.
- Electricity Minister Kgosientsho Ramokgopa has indicated that the revised Electricity Pricing Policy is expected to be released for public consultation in May 2026.
- The Department of Electricity and Energy continues to face capacity constraints and high vacancy rates, with recruitment underway to fill key posts.
- A high-level proposal regarding the establishment of an independent Transmission System Operator (TSO) is expected in May 2026, followed by a detailed roadmap in August.
- Eskom’s transmission build programme remains under pressure, with only 270.8 km delivered against a 423 km target for FY2026.
- The South African Wholesale Electricity Market is expected to launch in the third quarter of 2026, pending the finalisation of the Market Code and related regulations.
Why electricity reform matters
SAETA and Krutham argue that electricity reform is a structural economic necessity rather than an optional policy adjustment. The briefing note states that South Africa’s current monopoly-based electricity model is no longer capable of meeting the country’s investment, reliability and decarbonisation needs. A competitive market structure is expected to improve investment flows, increase supply diversity and support more affordable electricity pricing over time. The report also notes that global energy trends increasingly favour renewable energy. According to the International Renewable Energy Agency, most newly commissioned renewable energy projects globally now produce electricity at a lower cost than new fossil fuel alternatives. Domestically, South Africa’s aging coal fleet remains a significant risk. Approximately 8 GW of coal-fired generation capacity is expected to be decommissioned by 2030 under the Integrated Resource Plan, increasing urgency around new generation investment and transmission expansion.Eskom unbundling remains central
Eskom’s restructuring remains one of the most significant elements of the reform agenda. The National Transmission Company South Africa (NTCSA) began operating as a separate legal entity in 2024 and is expected to serve as the interim Transmission System Operator and market operator during the transition toward a fully competitive market by 2030. However, unresolved questions around the ownership and control of transmission assets continue to create uncertainty.
A proposal by Eskom in late 2025 to establish a fully independent TSO while retaining transmission assets within Eskom Holdings was overturned by the Presidency in February 2026 following concerns from creditors and market participants.
The Presidency and National Treasury are now leading the next phase of the restructuring process through a dedicated Eskom Restructuring Task Team. While progress has been made on the transmission side, the legal separation of Eskom’s distribution and generation entities remains incomplete. Municipal debt – which reached R111.6 billion by the end of March 2026 – continues to weigh heavily on Eskom’s financial sustainability and complicates the unbundling process.Municipal reform and tariff pressures
Municipal readiness for electricity reform remains uneven across the country. Only a small number of municipalities have adopted wheeling policies and approved wheeling tariffs, with progress largely concentrated in financially stable metros including Cape Town, George and Gqeberha through the Nelson Mandela Bay Metro. The City of Cape Town is exploring electricity procurement opportunities involving traders, although most municipalities still lack the technical and commercial capacity to participate effectively in competitive electricity markets. At the same time, electricity affordability remains a growing concern. Between 2007 and 2024, average electricity tariffs increased by 937%, significantly outpacing inflation. The revised Electricity Pricing Policy is expected to play a key role in reshaping tariff structures under the new market model, balancing affordability for low-income households with more cost-reflective pricing mechanisms.SAWEM expected to reshape electricity trading
(see page 76 of the report)
