Eskom holding South Africa hostage
There are fears that Eskom’s continuation of a High Court review application over the granting of new electricity trading licences could halt the transition to a more competitive market for years.
The background for the case revolves around the National Energy Regulator of South Africa (NERSA) granting electricity trading licences to five companies in 2024 and 2025.
The licences were seen in centralising South Africa’s evolving electricity market framework as per the Electricity Regulation Amendment Act, 2024.
The move aimed to improve competition, wheeling and trading as the system moves away from its vertically integrated monopoly.
However, Eskom distribution objected to the decision and launched a High Court review application challenging the regulator’s decision.
Energy expert Chris Yellend noted that the grounds were both technical and legal, and included procedural and substantive flaws in the regulator’s licensing process.
Eskom’s move was heavily criticised by the electricity minister, Kgosientsho Ramokgopa, who urged the state-owned utility to withdraw or at least pause its litigation.
The minister stated that the court action could erode confidence in the regulatory process and NERSA’s expedited development of electricity trading rules.
Eskom CEO Dan Marokane said that Eskom had placed the review application on hold when presenting the group’s financial results.
Although the move was seen positively in the market, questions have now been raised as court records show that Eskom did not stay the court application.
A directive issued by the Gauteng High Court in October 2025 confirmed that Eskom has since proceeded with its review application.
Eskom responds
In response, Eskom said that it supports the reform of South Africa’s electricity market and welcomes new competitors in the NERSA-led process. However, it admitted to continuing the court proceedings.
“When Eskom communicated a stay in proceedings, it was communicating its intention to create space for NERSA to conduct consultations and public hearings on the development of new trading rules,” it said.
“Even if all the parties agree to stay, there is no court order, because there is no provision in law for this. It is rather a pragmatic step to ensure the most optimal outcome for the electricity supply industry.”
Eskom stated that it could not abandon the steps, as it would have been required to either abandon its review application entirely or participate in procedural processes initiated by the trading parties.
It noted that NOA Group Trading (Pty) Ltd declined the request to stay the matter and proceeded, rather than waiting for a NERSA-led consultation on trading rules to conclude.
Eskom said that it had no practical option but to participate in procedural steps to protect its legal position.
“The original grounds for Eskom’s review application remain unchanged,” said Marokane.
“The granting of trading licenses today to new market entrants, such as traders, enables subsidy-contributing customers to evade contributing towards billions of rands in subsidies, which is why new, fair-trading rules are required.”
Marokane said that until new trading rules are finalised, all market participants are required to operate under the existing regulatory framework.
He said that proceeding with reform without clear and enforceable rules risks creating uncertainty over obligations, subsidies and consumer protection mechanisms.
He said that proceeding with reform without clear and enforceable rules risks creating uncertainty over
obligations, subsidies and consumer protection mechanisms.
Speaking with the Money Show, Yellend expressed doubt over Eskom’s claim that external parties are responsible for the continuation of the court case.
Yellend said that the move prevents the new traders from obtaining funding from banks, limits contracts with generators and stops sales to offtakers.
He added that prolonged litigation on the issue could delay South Africa’s transition to a more competitive market for years, given the inefficiency of South Africa’s courts.
“Whoever is to blame for the absence of a stay, one cannot escape the conclusion that Eskom has been speaking with two voices: one calibrated for media, public and political consumption, and another reserved for the courtroom,” said Yellend.
“This disconnect is not a minor communications lapse. It goes to the heart of institutional trust and the efficacy and timing of the reform agenda.”
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