New electricity laws for South Africa coming next month

The Department of Energy has gazetted the commencement date for the Electricity Regulation Amendment Act, which was signed into law by president Cyril Ramaphosa in August.
The act will commence from 1 January 2025, the department said, with the exception of the amendments to the definitions of “reticulation” and “distribution power systems” in section 1 of the Act.
It said these definitions will come into operation on a date to be determined by the president through a proclamation in the government gazette.
The electricity regulations are transformational for South Africa’s electricity landscape and are seen as a key step to levelling the playing field between Eskom and independent producers, while also enabling the country’s energy transition.
The regulations were passed by the National Assembly in March 2024 and signed into law by the president in August.
What the new laws entail
The Electricity Regulation Amendment Act outlines the establishment, duties, powers, and functions of the Transmission System Operator SOC Ltd (TSO).
The TSO must be established as an independent entity within five years. In the interim, the National Transmission Company of South Africa will serve as the TSO.
Additionally, the Act provides for an open market platform that enables competitive wholesale or retail buying and selling of electricity.
The Act provides for market operation as a new activity that may be licensed by the National Energy Regulator of South Africa (NERSA).
In addition, it requires the development of a Market Code that will establish rules to govern the future competitive market and draft the process through which the code will be approved.
The Act further clarifies the principles that apply to setting or approving prices, charges, and tariffs.
The Act also notes that NERSA must, among other things, enable an efficient licensee to recover the full cost of the licensed activity, allow for a reasonable return proportionate to the risk of the licensed activity, and may provide incentives for continued improvement of technical and economic efficiency.
As it does so, the regulator may consider factors such as the security of supply, the diversity of supply and the promotion of renewable energy.
The Act distinguishes between tariffs that must be set or approved by the Regulator, such as network charges, and those which are subject to a direct supply agreement or arise as an outcome of a competitive market.
To promote fair competition among electricity generators in the market, the Act states that the system operator must not show favouritism toward any particular generator or customer when managing the distribution or balancing of the system unless there are valid and justifiable reasons approved by the Regulator.
Additionally, access to the power system must be fair, transparent, and without discrimination.
The presidency noted that these changes are in line with the broader reforms guided by the Energy Action Plan and the Eskom Roadmap, which aim to modernise and transform South Africa’s electricity system to end load shedding and ensure long-term energy security.
“It is anticipated that diversity of supply and the promotion of renewables will stimulate demand for new skills, innovation and technology in the electricity sector, which will generate new industrial activity and, in turn, mitigate unemployment,” the presidency said.
The new law also reinforces the protection of public infrastructure as part of the fight against crime.
It provides for fines of up to R1 million or five years in prison—or both—for persons who, among other offences, damage, remove, or destroy any transmission, distribution, or reticulation cable, equipment, or infrastructure.
Persons who unlawfully receive such cables, equipment, or infrastructure face fines of up to R5 million, 10 years in prison, or both.
Going forward, the Act will lead to long-term energy security, a more competitive energy system, a more rapid uptake of renewable energy sources, and ultimately lower energy prices for all South Africans.