South Africa is entering a new era in electricity regulation as major reforms to its power sector take effect between 2025 and 2026, reshaping how energy is produced, sold, priced, and consumed. These changes are designed to respond to long-standing challenges such as unreliable supply, outdated infrastructure, over-dependence on a single utility, and the need to accelerate renewable energy adoption. At the heart of the overhaul is the Electricity Regulation Amendment Act (ERAA) — landmark legislation that significantly updates the Electricity Regulation Act of 2006 and sets the stage for a more competitive, transparent, and consumer-oriented electricity market.
Why the reform matters
South Africa’s electricity grid has struggled with frequent load shedding — scheduled blackouts that result from inadequate generation capacity and maintenance backlogs. To address these issues, the government has embarked on a series of reforms aimed at modernising the sector, diversifying energy sources, lowering costs, and attracting investment. The ERAA, signed into law by President Cyril Ramaphosa in August 2024, came into force on 1 January 2025, with key aspects extending into 2026.
From monopoly to competition
One of the most profound shifts under the new framework is the move away from a state-controlled electricity monopoly toward a competitive energy market. Historically, Eskom — the state-owned utility — has dominated generation, transmission, and distribution. The amendments aim to unbundle these functions and introduce multiple participants into the market. Independent power producers (IPPs) and municipalities will find it easier to generate and sell electricity, thanks to streamlined licensing and registration processes, especially for small producers generating under 100 kW.
A Transmission System Operator (TSO) will be established as an independent entity within five years, with the National Transmission Company of South Africa serving in the interim. The TSO’s role is to manage the national grid, ensure non-discriminatory access for all producers, and maintain system stability — crucial steps for fair competition and efficient power delivery.
New consumer rights and billing structures
Under the emerging rules set to formalise through 2026, households and businesses can expect greater transparency in billing and tariff structures. Instead of one-size-fits-all rates, pricing may shift toward time-of-use or tiered structures, where costs vary depending on peak and off-peak demand. This aims to encourage efficient use of electricity and reduce stress on the grid during high-demand periods. Clearer bills and improved dispute resolution mechanisms will also give consumers more control and accountability over their energy costs.
Supporting renewables and energy choice
A central goal of the new laws is to integrate renewable energy into the national mix and empower consumers to make greener choices. By lowering barriers for rooftop solar and battery storage systems, homeowners and businesses can generate and, in some cases, sell excess power back into the grid — a model similar to consumer choice in telecom services. This decentralised approach not only boosts energy independence but also aligns with broader sustainability targets and private investment trends in clean energy.
Preparing for the transition
For everyday residents, the transition will involve adjustments. Households should prepare for changes in tariff guidelines, new billing formats, and potentially updated meter technologies such as smart meters that provide real-time usage data. Consumers are encouraged to stay informed about regulatory updates and explore energy-efficiency measures, from demand management to adopting renewable systems at home.
The bigger picture
Taken together, South Africa’s new electricity laws represent a comprehensive shift in energy governance — moving from centralised control toward an open, competitive market with stronger consumer rights, increased private sector participation, and a blend of traditional and renewable energy sources. For households and businesses alike, these reforms could mean more choices, better pricing options, and a more resilient power system in the years ahead.
