President Cyril Ramaphosa has signed the Electricity Regulation Amendment Act into law, marking a significant step in South Africa’s energy transition.
However, similar to the Basic Education Laws Amendments (Bela) Act, two sections were excluded specifically, the definitions of “reticulation” and “distribution power systems.”
These provisions will be implemented at a later date, as determined by the president through a proclamation in the government gazette.
In a notice announcing the enactment, Ramaphosa confirmed that the Act will take effect on January 1, 2025, excluding the deferred provisions.
The notice stated: “In terms of section 33 of the Electricity Regulation Amendment Act, 2024 (Act No. 38 of 2024), I hereby fix January 1, 2025 as the date on which the said Act shall come into operation, save for amendments to the definitions of ‘reticulation’ and ‘distribution power systems’ in section 1 of that Act, which definitions shall come into operation on a date to be determined by the President by Proclamation in the Government Gazette.”
This legislation introduces critical changes to South Africa’s electricity framework, aiming to create a more equitable and competitive environment between Eskom and independent power producers (IPPs).
The National Assembly adopted the Act in March 2024, and the president signed it into law in August.
One of the Act’s key objectives is to establish an open-market platform for the competitive wholesale and retail trade of electricity.
It also authorises the National Energy Regulator of South Africa (NERSA) to license market operations as a distinct activity.
Ramaphosa emphasised that the regulator will consider factors such as supply security, supply diversity, and renewable energy promotion when granting licenses.
The Act also sets clear guidelines for tariff regulation. It differentiates between tariffs that must be approved by NERSA, such as network charges, and those arising from direct supply agreements or competitive market outcomes.
Furthermore, to ensure fair competition among electricity generators, the Act mandates that the system operator remain impartial when dispatching or balancing the grid, except for objectively justified reasons approved by the regulator.
These amendments are seen as pivotal in advancing South Africa’s energy goals and transitioning to a more sustainable and competitive electricity market.
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