South Africa's electricity market reforms have reached a critical point, with the regulations now being finalised by the National Energy Regulator of South Africa (Nersa) set to determine whether the country succeeds in attracting the private investment needed to build a competitive, secure and affordable electricity market, states industry body the South African Energy Traders Association (SAETA).
As South Africa transitions from an electricity system dominated by State-owned Eskom to one with multiple market participants, including buyers, sellers and privately owned generators, Nersa is finalising the market code, which underpins the South African Wholesale Electricity Market (SAWEM), as well as the trading rules, which provide for specific trading arrangements within the evolving electricity market.
Together, SAETA says, these frameworks will determine how electricity is bought and sold, how market participants compete and whether investors have the regulatory certainty needed to commit capital to new generation and trading projects.
Crucially, over the medium to long term, the industry body says efficient market pricing signals must drive the cost of electricity down to allow South Africa to achieve its economic growth targets.
