Eskom group chief executive Dan Marokane said the restructuring marks a turning point in how electricity will be produced, traded and delivered. South Africa’s electricity sector is entering a decisive phase of restructuring, with Eskom and the National Transmission Company South Africa (NTCSA) receiving ministerial approval to implement core elements of the Electricity Regulation Amendment Act (ERAA). The move formally sets the country on a path toward a competitive, multi-player electricity market, a historic departure from Eskom’s decades-long vertically integrated model.
The Minister of Electricity and Energy, Dr Kgosientsho Ramokgopa, has approved Eskom’s refined unbundling strategy, confirming a new corporate structure that positions the utility to operate as a group of specialised subsidiaries. These include GenerationCo, the National Electricity Distribution Company of South Africa (NEDCSA), the renewable-focused Eskom Green, and the already-separated National Transmission Company South Africa. A fully independent Transmission System Operator (TSO) will be created outside Eskom.
“Today’s announcement by the Minister represents a significant step forward in establishing a competitive electricity market in South Africa, supported by the rule of law while maintaining strong public oversight of the power system and its assets,” he said. “This marks the next stage of the groundwork to enable more affordable and competitive pricing by driving competition, efficiency, and diversity of supply, ultimately stabilising South Africa’s electricity system.” Marokane stressed that Eskom has chosen a structure that enables reforms without destabilising the system. “We recognise the urgency of reform to benefit consumers, and among all the options for Eskom’s next stage of unbundling, we have chosen the framework that enables the fastest and most orderly transition,” he said.
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The chosen model, he noted, “strengthens the level playing field for market participation and provides greater certainty for investors bringing much-needed capacity into the system”. Demand forecasts underpin the urgency of these market changes. According to Marokane, “growing the electricity marketplace requires expanding supply, with demand projected to increase by 1.5% in the short term and 2% in the long term. Given the variability of renewable energy, South Africa will need to grow generation capacity from 66GW in 2024 to 107GW by 2034.”
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