The South African electricity sector closed 2025 with a decisive shift towards a competitive market model, signalling that long-delayed reforms are finally moving from policy to execution. The most significant step came on 27 November 2025, when the National Energy Regulator of South Africa approved the National Transmission Company of South Africa’s Market Operator Licence. The decision effectively moves the country from planning to the early mechanics of a competitive electricity market.
Nersa has also established the Electricity Market Advisory Forum, a structure intended to guide the roll-out of the competitive market framework. EMAF will advise the regulator on the implementation of the Market Rules and Market Code, marking the first formal oversight mechanism for market design. Major regulatory progress earlier in the quarter included Nersa’s approval of the Grid Capacity Allocation Rules, which seek to restore predictability to grid access. The rules are designed to ensure fair and transparent allocation of scarce grid capacity, reduce project uncertainty and strengthen investor confidence. Their introduction follows years of grid bottlenecks and an increasingly urgent need for reliable queue management as renewable energy projects multiply.
Grid access remains one of the sector’s most critical pressure points, particularly as decentralised renewable generation accelerates across the country. Eskom estimates that rooftop solar capacity has risen by 218 percent in just three years, climbing from 2.3 GW in October 2022 to 7.4 GW. This shift reflects both the legacy of load shedding and the growing desire among households and businesses to secure supply independently. The push for reform is also reshaping regional electricity dynamics. Enpower Trading has become the first privately owned South African company to obtain conditional market participant membership in the Southern African Power Pool. Alongside Africa Greenco, which previously secured a licence to export electricity via SAPP, these companies are leading private regional market participation. Eskom Distribution’s appeal against Greenco’s licence and other trading licences has placed renewed pressure on Nersa to accelerate rule-making for traders.
On the domestic grid, infrastructure development continued to advance. Seriti Green completed and handed over the Vunamoya Main Transmission Substation to Eskom and the NTCSA. The substation will connect 155 MW from the Ummbila Emoyeni One wind project, the first phase of a planned 900 MW development. Built ahead of schedule by Tractionel Enterprise, the project strengthens Mpumalanga’s positioning as an emerging green energy hub and demonstrates the growing role of local contractors in a transforming power system. Eskom’s operational recovery also gained momentum under the leadership of Chair Mteto Nyati. The utility’s Electricity Availability Factor has exceeded 70 percent on 39 occasions this financial year.
The year-to-date EAF of 63.51 percent represents an 8.02 percent improvement since October 2022. Around 7 800 MW of capacity has been returned to service, and Eskom’s credit rating has improved since 2022. These gains follow a decade marked by systemic failures in maintenance, governance and planning. Taken together, progress in market reform, grid expansion and utility recovery shows a sector rebuilding itself after years of political interference and institutional inertia. The momentum can be traced in part to a single pivotal decision: the moment President Cyril Ramaphosa compelled the then Minister of Mineral Resources and Energy to lift the licensing cap for generation projects.
The move unlocked a surge of private investment and set the stage for the reforms now advancing. The next phase will require sustained discipline. Full unbundling of Eskom must be completed, the competitive electricity market must be implemented with precision, and all actors must remain accountable for a transparent, stable and well-governed transition. If South Africa maintains its current trajectory, it can secure electricity availability, underpin economic growth and unlock employment associated with a modernised energy system.
By: Thomas Garner
Thomas Garner holds a Mechanical Engineering degree from the University of Pretoria and an MBA from the University of Stellenbosch Business School. He is self-employed, focusing on energy, energy-related critical minerals, water and communities. He is a Fellow of the South African Academy of Engineering and a Management Committee member of the South African Independent Power Producers Association.