The South African Wholesale Electricity Market (SAWEM) is due to launch at the end of September 2026 (originally set for April 2026). Five structural blockages could stall it further before it moves any power.
A grid with no fallback
More than half of Eskom’s coal-fired fleet needs replacing within 15 years, an undertaking that the State is unable to fund. That constraint sits behind the country’s shift from a single-buyer monopoly to a multi-market electricity system built around the SAWEM.
The model, enabled by the Electricity Regulation Act (ERA) as amended, aims to draw in private capital at a scale the fiscus cannot match on its own. It grew out of the 2022 Energy Action Plan (EAP), which turned chronic loadshedding into the case for structural reform.
In 2024, 91% of newly commissioned utility-scale renewable projects delivered power more cheaply than the newest fossil fuel alternative, according to the International Renewable Energy Agency (IRENA).
South Africa’s ageing coal fleet cannot compete with that trend indefinitely, and the country cannot keep paying monopoly-era prices for capacity nearing the end of its technical life. The policy intent is not in question.
A new report from the South Africa Electricity Traders Association (SAETA), produced by Krutham, sets out actions needed to move from legislation to a functioning market. What it also documents, in granular detail, is how far execution still lags behind that intent.
For context 10 actions to deliver green, accessible and secure electricity in South Africa
Momentum but no guarantee
Eskom’s energy availability factor (EAF) climbed to 64.55% by early January 2026, and unplanned outages fell from 13,876MW to 7,705MW year-on-year, according to Eskom’s own reporting. According to South Africa’s utility, loadshedding has eased and diesel reliance has dropped.
In February’s State of the Nation Address, President Cyril Ramaphosa went further, announcing a plan to spin Eskom’s transmission assets into a fully independent transmission system operator (TSO), with a National Energy Crisis Committee (NECOM) task team given two years to execute it.
None of this guarantees the SAWEM launches on schedule, or that it delivers what it promises once it does. The SAETA report identifies five structural blockages that could still derail the transition.
Five ways the reform can stall
1. No roadmap, no accountability
The ERA (as amended) sets the destination, but does not assign a timetable. Without a Cabinet-endorsed roadmap linking institutions, milestones and consequences, the report warns, reform risks drifting across state entities that each have reason to wait for someone else to move first.
2. Eskom’s unbundling drags
Eskom Holdings has backed the NECOM workstream to separate out the transmission system operator. But the utility’s future shape, including the size of its generation fleet and its balance sheet, still remains undefined. A guarantee structure tied to the National Transmission Company South Africa (NTCSA) is still blocking full separation.
3. Regulators are short on capacity
The National Energy Regulator of South Africa (Nersa) must license traders, approve tariffs and enforce non-discriminatory grid access, all at once, with limited staff. Slow approvals and policy uncertainty raise risk for every private project that has to wait on a licence.
4. Municipal debt blocks wheeling
Municipalities manage about 40% of South Africa’s grid and owe Eskom more than R105 billion in arrears, a debt the report flags as a systemic risk. Without standardised wheeling frameworks and financial stabilisation, most municipalities cannot let customers buy power from independent producers at all.
5. The grid can’t fit the pipeline
Transmission capacity is the binding constraint. The National Transmission Company needs to build roughly 1,450km of new lines per year by 2034 to connect 56GW of new generation. Until then, the report notes, new capacity remains stranded, including an 18GW pipeline of private projects with nowhere to connect.
Traders show the model already works
While the blockages persist, part of the multi-market is already operating. Between 2023 and 2025, private power projects worth 4.7GW reached financial close, according to Power Futures Lab’s tracking of the sector.
Traders were the offtaker on 56% of that capacity, or 2.6GW, aggregating demand from multiple customers instead of relying on one large buyer or a government guarantee.
Have you read? Private generation procurement takes off as SA prepares for wheeling and energy trade
Traders surveyed for the report hold a further 18GW pipeline awaiting financial close, split between 61% solar and 39% wind. These projects do not touch the national balance sheet, and many include self-build agreements that upgrade the grid at private expense.
That pipeline is also where the strain shows first. Curtailment events, where generation is switched off because the grid cannot absorb it, jumped from fewer than 30 in the previous financial year to more than 100 in this one.
Coordination is the real test
Execution risk is about getting institutions that rarely move in step to move together. Eskom Holdings, Nesra, National Treasury, the NTCSA, and the South African Local Government Association (Salga) each hold a separate piece of the puzzle, from the utility’s balance sheet to municipal tariff design.
The report’s answer is a structured public-private forum, built on the NECOM model, to surface constraints early and stop the roadmap from splintering into parallel, uncoordinated processes.
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