Energy

Big changes coming for electricity prices in South Africa

Jonathan Hoyle

 ·30 Jul 2026

South Africa’s cabinet has approved the publication of the Revised Electricity Pricing Policy for public comment, looking to add transparency to the country’s current tariffs.

The revisions are coming as South Africa has endured years of steep tariff hikes.

In the past five years alone, electricity prices have more than doubled for South African households, due to the compounding effect of Eskom’s tariff hikes.

After years of double-digit increases, Eskom approved a 8.8% hike for 2026, which took effect in April, with another 8.8% increase coming for the 2027 financial year.

While Eskom has not implemented load shedding in the past year, electricity prices and their impact on production costs and the cost of living have become the new crisis in the sector.

The new pricing policy is intended to update the 2008 Electricity Pricing Policy to reflect developments in the electricity supply industry and address these issues.

Key developments include the unbundling of Eskom, a more diversified energy mix, and independent power producers entering the market.

Cabinet said the policy will strengthen the regulatory framework governing electricity prices, tariffs and charges, and provide tariff transparency through the unbundling of tariffs across generation, transmission, distribution and retail activities.

This will consolidate the regulatory arrangements for electricity pricing across several interfaces, such as those between generators and traders.

The policy will also establish a framework for regulating these interfaces by the National Energy Regulator of South Africa (NERSA).

The policy is intended to support the introduction of cost-reflective tariffs while protecting vulnerable users and strategic economic sectors.

In addition to the pricing policy revision, the cabinet also approved the publication of the draft Electricity Sector Market Transformation Position Paper for public comment.

This position paper will provide a framework for how South Africa can move away from its current, state-controlled electricity system towards a competitive energy market.

This would align the country’s energy sector with current regulations, including the Electricity Regulation Amendment Act and the Energy Action Plan.

South Africa’s cabinet said this position paper is intended to support the country’s energy sector by reducing reliance on a single supplier.

“The proposed reforms seek to improve energy security and reliability by reducing reliance on a single electricity supplier and enabling greater participation in electricity generation and trading,” it said.

“The reforms are also aimed at attracting investment in electricity generation, transmission and distribution infrastructure, supporting job creation and economic growth, and reducing electricity costs over the long term.”

Currently, Eskom is South Africa’s sole bulk electricity provider, but load shedding and continuous price increases have eroded public confidence in the state-owned company.

Electricity tariff increases in South Africa