In a significant move towards modernizing South Africa’s electricity sector, President Cyril Ramaphosa has officially signed the Electricity Regulation Amendment Act into law. This landmark legislation introduces sweeping changes aimed at fostering competition, ensuring energy security, and reducing energy costs across the nation.
The newly amended Act revises the Electricity Regulation Act of 2006 to address the current challenges facing South Africa’s power industry. Key among these reforms is the creation of a competitive electricity market, which is expected to drive down prices and attract substantial investment in new generation capacity.
One of the most transformative aspects of the Act is the establishment of an independent Transmission System Operator (TSO), which will oversee the national grid. This entity must be established within the next five years. In the interim, the National Transmission Company of South Africa will assume the role of TSO, ensuring that the grid is managed with transparency and fairness.
The Act also lays the groundwork for an open market platform, allowing for the competitive buying and selling of electricity at both wholesale and retail levels. This market operation, a new activity to be licensed by the National Energy Regulator of South Africa (NERSA), promises to revolutionize how electricity is traded in the country.
To govern this new competitive market, the Act mandates the development of a Market Code, which will outline the rules and regulations necessary for fair competition. NERSA will play a crucial role in setting or approving prices, charges, and tariffs, ensuring that licensees can recover their costs while earning a reasonable return on their investments.
The legislation also includes stringent measures to protect South Africa’s critical electricity infrastructure. Individuals found guilty of damaging or sabotaging transmission, distribution, or reticulation equipment face severe penalties, including fines of up to R1 million or five years in prison. Those who unlawfully receive such equipment could be fined up to R5 million or face up to 10 years in prison.
These reforms align with the broader goals of the Energy Action Plan and the Eskom Roadmap, both of which seek to end load shedding and secure long-term energy stability. By promoting the diversity of supply and encouraging the adoption of renewable energy sources, the Act is expected to spur innovation, create new jobs, and stimulate industrial growth.
In the words of the Presidency, these changes “will lead to long-term energy security, a more competitive energy system, and ultimately lower energy prices for all South Africans.”
As the country moves forward, the implementation of the Electricity Regulation Amendment Act marks a pivotal step towards a more reliable, sustainable, and affordable energy future for South Africa.
For further media enquiries, please contact Vincent Magwenya, Spokesperson to the President, at media@presidency.gov.za.
Issued by: The Presidency, Pretoria
