In a belated move, the National Energy Regulator of South Africa (Nersa) has announced an 11-month process to set rules for electricity trading, having already licensed ten trading entities, while also preparing to hold hearings on three more licence applications in August.

In terms of the timeline presented by the regulator, the intention is to have the rules Gazetted by June next year and Nersa confirmed that that traders that were already licensed would continue operating while the rules were being finalised.

In a statement, Nersa indicated that it had the statutory authority, in line with Section 35 of the Electricity Regulation Act, to formulate a broad spectrum of rules governing the electricity supply industry, including electricity trading rules and import and export trading rules.

“These rules are designed to create a fair and balanced framework for electricity traders, supporting the structured growth of the electricity supply industry,” Nersa said in a statement, arguing that the initiative would support a competitive and transparent electricity market.

The regulator would also seek to provide “clear guidelines for participation, compliance criteria and responsibilities for licensed traders, whether they own physical distribution assets or not”.

“The development process will involve thorough research, benchmarking, engagement with stakeholders, public hearings and workshops to ensure a comprehensive and inclusive approach,” it added.

It also outlined the following estimated timelines:

• The presentation, in August, of position papers by members of a working group set up to develop the rules;
• Two working group sessions in September and October;
• A workshop, in November, on draft trading rules;
• A trading rules submission to the Nersa approval process also in November;
• A cross-border trading rules submission for Nersa’s approval process in March 2026; and
• The final Gazetting of the rules in June 2026.

The regulator’s move to define the rules for trading follows a surprise indication from Eskom late last year that it intended to initiate a High Court review of Nersa’s decision to grant four additional trading licences in what it described as its area of supply.

This, despite the fact that Nersa had already started approving trading licences in 2014 and had licensed five trading entities before Eskom’s objection to the four additional licencees.

That legal process was yet to begin and it was not immediately clear whether Eskom would hold off now that Nersa had initiated a process to define the rules for trading.

Interestingly, the regulator is scheduled to hold hearings in August as part of an adjudication of yet more trading licence applications from Pioneer Power Trading, Nomusize and Red Rocket Trading.

To date licences have been approved for: PowerX, EnPower Trading, Neura Trading, Energy Exchange of Southern Africa, Envusa Trading, CBI Electric Apollo, Discovery Green, Green Electron Market and GreenCo Power Services. GreenCo Power Services has also been granted a cross-border electricity trading licence by Nersa.

In addition, Eskom Holdings’ own National Transmission Company South Africa (NTCSA) also successfully applied for trading and cross-border trading licences from the regulator as part of its legal separation process.

Energy commentator Chris Yelland, of EE Business Intelligence, said establishment of a nearly one-year rule-setting process, more than ten years after having started licensing traders, raised questions, including about the role that the regulator was playing in helping South Africa advance beyond loadshedding to a more progressive electricity supply industry.

Yelland said it also raised a separate question about how long Nersa would require to approve the Market Code needed for the launch of the South African Wholesale Electricity Market, which is slated to be launched in April next year.

The NTCSA has also applied for a Market Operator licence, which still needs to be adjudicated by Nersa.