FAQs: South Africa's Wholesale Electricity Market

The South African Wholesale Electricity Market (SAWEM) is a proposed short-term trading platform for bulk electricity, expected to commence at the end of 2026. Governed by the Market Code and Rules, it allows power producers and large buyers to trade electricity one day ahead or in real-time. While intended to increase competition and transparency, concerns are raised regarding the conflict of interest since the Market Operator is housed within the National Transmission Company of South Africa (NTCSA), a subsidiary of Eskom. The document highlights that the market's design could either facilitate a transition to affordable renewable energy or entrench fossil fuel generation and financial risks for municipalities.

• The SAWEM is a short-term wholesale platform for buying and selling bulk electricity, where transactions occur one day ahead of production or in real-time, distinct from long-term power purchase agreements.
• Trading on the SAWEM is expected to begin at the end of 2026, with the National Energy Regulator of South Africa (NERSA) responsible for approving the Market Code and Rules and overseeing the platform's transparency.
• Market participation is voluntary for most generators and off-takers, but Eskom Generation and Eskom Distribution are compulsory participants.
• There is a significant governance concern because the Market Operator, which manages surveillance and dispute resolution, is located within the NTCSA, a subsidiary of Eskom, creating a potential conflict of interest since Eskom is also a market participant.
• The proposed Market Code fails to incorporate climate objectives, such as greenhouse gas emissions monitoring or carbon budgeting, which are required by the Climate Change Act, 2024.
• Consumers may face costs for uncompetitive power generation, including stranded assets like nuclear or high-capacity factor gas, through a 'legacy charge' included in the wholesale tariff.
• Municipalities may struggle with the technical requirements of forecasting demand for the day-ahead market, potentially leading to penalties and impacting the electricity prices for their consumers.

APA

Natural Justice (2026). FAQs: South Africa's Wholesale Electricity Market. https://naturaljustice.org/wp-content/uploads/2026/06/FAQs_Market-Code-and-Rules_FINAL-1.pdf

Chicago

Natural Justice. FAQs: South Africa's Wholesale Electricity Market. 2026. https://naturaljustice.org/wp-content/uploads/2026/06/FAQs_Market-Code-and-Rules_FINAL-1.pdf.

Wikipedia

{{cite report |author=Natural Justice |title=FAQs: South Africa's Wholesale Electricity Market |date=June 2026 |url=https://naturaljustice.org/wp-content/uploads/2026/06/FAQs_Market-Code-and-Rules_FINAL-1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{naturaljustice2026faqs, author = {{Natural Justice}}, title = {{FAQs: South Africa's Wholesale Electricity Market}}, institution = {Natural Justice}, year = {2026}, month = jun, url = {https://naturaljustice.org/wp-content/uploads/2026/06/FAQs_Market-Code-and-Rules_FINAL-1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }