South Africa Sets Phased Electricity Pricing Rules with Temporary Eskom Safeguards Until 2030

South Africa unveiled a new electricity pricing blueprint on June 15, 2026, that would end the state utility Eskom’s monopoly and introduce competition in the power sector. The plan, posted on the National Energy Regulator of South Africa’s website, separates the cost of producing electricity into distinct components and creates a regulated wholesale market scheduled to operate until 2030.

Under the proposal, power producers would receive three types of payments: one for keeping generation units stable, one for grid stability services, and one tied to the real-time cost of producing electricity.

NERSA plans to use temporary “vesting contracts” that set a baseline price based on running costs, with the state topping up revenue if market prices fall below that level and producers repaying the difference if prices rise above it. The public consultation window and stakeholder hearings are due to wrap up in August, with NERSA’s formal decision expected weeks to a few months later.

Rollout of the plan is phased from the third quarter of 2026 through 2027.

The changes follow years of rolling blackouts that peaked between 2023 and 2024 and prompted President Cyril Ramaphosa to scrap licensing requirements for private power generation. That policy shift led to more than 120 utility-scale renewable projects built by companies including France’s Neoen and Saudi Arabia’s ACWA Power.

Over the past decade, South Africa’s renewable procurement has attracted more than 250 billion rand, or $14 billion, in committed private investment.

The Energy Council of South Africa, which represents the country’s top corporate CEOs and financial institutions, has criticized the plan’s mechanics. Vasanie Pather, a project delivery manager at the Energy Council, said the current design gives Eskom too much protection, suppresses real competition and risks trapping South Africa in years of distorted prices.