FAQs: South Africa's Wholesale Electricity Market

This fact sheet describes the proposed South African Wholesale Electricity Market (SAWEM), a short-term trading platform for bulk electricity designed to introduce competition into the energy sector. It outlines the role of the Market Operator, the regulatory oversight of NERSA, and the potential impacts on electricity pricing, renewable energy transition, and municipal operations.

• The South African Wholesale Electricity Market (SAWEM) is a proposed platform for the short-term buying and selling of bulk electricity, where transactions occur one day ahead of production and use or in real-time. Trading is expected to begin at the end of 2026.
• The Market Code and Rules, developed by the National Transmission Company of South Africa (NTCSA) and finalized by the National Energy Regulator of South Africa (NERSA), will govern the SAWEM. These rules aim to regulate energy producers and prevent improper market conduct such as price-fixing and collusion.
• Market participation is voluntary for most generators and off-takers, but Eskom Generation and Eskom Distribution are compulsory participants. To manage its transition, Eskom will be allocated vesting contracts through the Central Purchasing Agency (CPA), which will act as a wholesale buyer to maintain system integrity.
• The wholesale electricity tariff will include a 'legacy charge' to help the government maintain existing power purchase agreements (PPAs) with Independent Power Producers (IPPs). This means consumers may pay for uncompetitive power generation, including stranded assets like nuclear or high-capacity factor gas.
• There is a significant concern regarding a conflict of interest because the Market Operator is housed within the NTCSA, a subsidiary of Eskom Holdings, while Eskom's own generation and distribution arms are market participants.
• The document argues that the Market Code fails to integrate climate objectives, such as greenhouse gas emissions monitoring and carbon budgeting, and does not align with the Climate Change Act, 2024.
• While municipalities are not required to participate in the SAWEM, they must act as 'balance responsible parties' by forecasting their electricity demand. The document notes that many municipalities may lack the technical capacity for this, potentially leading to penalties or continued reliance on Eskom.

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} }