Ahead of a high-level stakeholder workshop on the route to establish the South African Wholesale Electricity Market (SAWEM), the Energy Council of South Africa reaffirmed its support for SAWEM as a key milestone in the country’s electricity reform programme.
Cornel Claassen, Manager: Project Delivery, and James Mackay, CEO, Energy Council of South Africa.
The introduction of a wholesale electricity market is expected to improve transparency, enable more efficient system dispatch and support long-term investment in generation and system flexibility.
While the analytical groundwork for the market design has largely been completed, the next phase will require careful coordination of licensing frameworks, tariff reforms and institutional readiness to ensure a credible transition.
Cornel Claassen, Manager: Project Delivery at the Energy Council and Technical Lead of the SAWEM Standing Committee said: “SAWEM represents a structural reform that can strengthen price transparency and encourage more efficient investment decisions across the electricity sector.
“However,” he said, “the success of the market will depend on disciplined implementation and clear sequencing of regulatory, institutional and commercial changes.”
The Energy Council notes that electricity market reforms of this scale must be introduced in phases to allow institutions and market participants to adapt to the new market structure.
Transitional mechanisms such as vesting contracts and legacy cost arrangements will play an important role in maintaining system stability while the market framework develops.
According to Claassen, a wholesale market can also unlock new opportunities for flexible generation, battery storage and demand-side participation as the power system integrates higher shares of renewable energy.
“Wholesale markets reward flexibility and responsiveness in the power system,” he says. “If implemented carefully, SAWEM can create a more transparent and competitive electricity sector that supports investment while strengthening the resilience of South Africa’s power system.”
In his foreword to the piece, James Mackay, CEO of the Energy Council of South Africa notes that a well-designed and well-implemented wholesale market provides a framework for competition, price discovery and private investment. More importantly, SAWEM acts as the catalyst for broader reform. He acknowledges that much has already been written about SAWEM’s architecture and promise, including recent detailed analytical work by Prof Anton Eberhard on behalf of the National Business Institute, and commentary from Chris Yelland. “There is broad agreement that the design principles are sound and aligned with international experience. There is also recognition that implementation will determine whether those principles translate into durable reform. Building on that discussion, the factors highlighted by Cornel Claassen add a perspective on how the transition can be structured in a way that strengthens credibility and manages risk.”
Mackay adds, “The focus therefore turns to the mechanics of implementation: how commencement is defined, how instruments are sequenced, how risk is allocated, and how commercial exposure is introduced over time. The calibration of this transition will influence how risk moves through the system, how prices are interpreted and how confidence is built during this period of structural change.”
For more insight, Claassen’s perspective can be read here: Designing the Transition to Ensure Credible Reform
High-level stakeholder workshop
The Energy Council further comments that the SAWEM workshop held on 20 March 2026 marked an important advance in the reform process, giving stakeholders greater clarity on the phased rollout of the market and bringing implementation issues into sharper focus.
The workshop was convened by the Department of Electricity and Energy (DEE), together with the National Transmission Company South Africa (NTCSA) and the National Energy Regulator of South Africa (NERSA), with support from the Energy Council. The council says the session demonstrated the value of clear public-sector leadership and structured business-government partnership in building momentum, improving coordination and advancing the discussion on market reform.
SAWEM matters for South Africa because it is central to how the country’s electricity sector will evolve in the years ahead. The reform is intended to support a more open, transparent and functional market, but its success will depend on disciplined implementation, institutional readiness and effective coordination across government, regulators and industry.
Mackay said: “The reform path is becoming clearer. The task now is execution. We welcome the leadership being shown by the DEE in driving progressive engagement on market reform. Bringing business and government together in a structured forum like this is essential if South Africa is to move from broad support for reform to practical implementation.
“The workshop showed growing clarity on how SAWEM will be phased in, and that is important for market confidence. It also made clear that the next phase will require continued focus on readiness, risk management, institutional capacity and coordination across all role players.”
The event was attended by senior representatives from the Presidency, Eskom Generation and Distribution, NTCSA, NERSA, financial institutions, independent power producers, electricity traders and industry associations. Leadership from NTCSA and NERSA presented their respective perspectives on how the market will be phased in, helping to build a clearer shared understanding of the implementation path and the roles different institutions will need to play.
Some of the priorities raised were the need for clearer detail on the actions and capacity required to move from roadmap to implementation, improved risk measures, more structured engagement between role players, consumer-impact scenarios, stronger system-planning tools, and transparent, regular communication. Stakeholders also highlighted the need to align regulatory, commercial and system processes as the market develops.
The council says the proposed quarterly workshops of this kind can play an important role in sustaining momentum, surfacing risks early, and strengthening coordination across government, regulators, and market participants.
For more information visit: www.energycouncil.org.za
