Bad news for anyone who wants lower electricity prices in South Africa

Energy Jonathan Hoyle 9 Sep 2026 Energy Bad news for anyone who wants lower electricity prices in South Africa Jonathan Hoyle  ·9 Sep 2026 Electricity and Energy Minister Kgosientsho Ramokgopa says new legislation on electricity sector transformation does not guarantee an easing of cost pressures facing South Africa’s households. Responding to a parliamentary Q&A, the minister said “there can be no responsible guarantee that the transformation of the energy sector will immediately eliminate the cost pressures” in the country. He said the plans are aimed at addressing medium- to long-term issues with the national grid, and the impact on energy prices is to “reduce the upward pressure on electricity costs”. To this point, electricity prices are expected to continue rising, just not at levels previously seen. Eskom recently declared that it would no longer implement double-digit tariff hikes in the country—but its projected tariff path still envisions annual price hikes of 6% through to 2050. For 2027, another 8.8% tariff hike is already on the cards. There is no talk of cutting prices. Ramokgopa recently gazetted the Electricity Sector Transformation Position Paper for public comment. This, along with the Revised Electricity Pricing Policy, seeks to transform South Africa’s energy sector into a competitive market and add transparency to energy prices. A more competitive market could yield better prices. Notably, the planned comprehensive overhaul of the country’s energy sector would end Eskom’s monopoly over the industry, with the company unbundled into three independent operators. These three companies would operate in distinct areas of the energy supply process – generation, transmission, and distribution. Private sector participants would also be invited into the energy sector, creating a more competitive environment. Eskom is already feeling the heat from changes in South Africa’s energy landscape, with the group recording a notable decline in electricity sales. This has happened alongside customers turning to alternative producers and self-generators, such as rooftop solar. Ramokgopa said sector transformation was necessary “to address the structural weaknesses that have contributed to unreliable electricity supply, insufficient investment, constrained grid capacity, and rising system costs.” “These measures are intended to increase investment in new generation capacity, improve the efficient use of the national grid, strengthen security of supply, and introduce greater discipline into the electricity supply system.” Lower prices in the long term, maybe While the transformation of the energy sector is not guaranteed to lower electricity prices, Ramokgopa said the gazetted policy aims to “reduce the upward pressure on electricity costs”. He said the sharp rise in electricity prices would be addressed in several ways, including preventing energy sector inefficiencies from being passed on to consumers. “Tariffs will be based only on efficient and prudent costs, while excessive technical losses, electricity theft, bad debt and other inefficiencies will not be recoverable from consumers through tariffs,” he said. He said tariffs would be scrutinised by the National Energy Regulator of South Africa (NERSA) before being approved. “NERSA will be required to rigorously assess asset values, investment prudency and operational efficiency to ensure that consumers only pay for justified costs,” he said. The revised pricing policy would be implemented gradually over five years, to avoid sudden changes or shocks to electricity costs. It would also standardise tariff methodologies across South Africa’s municipalities, to reduce unjustified price increases and hidden charges. A major part of the proposed pricing adjustments is the increased transparency in electricity tariffs, with costs being broken down by sector. The cost of energy, network and ancillary services, and municipal surcharges would all be separated to make it easier to identify and challenge unjustified costs. Ramokgopa said that introducing competition into the energy sector would also encourage lower electricity prices in the long term. “Open access to grids and wheeling provisions will enable customers to purchase electricity from alternative suppliers, encouraging greater competition and potentially lowering long-term system costs,” he said. “Collectively, these measures are expected to improve affordability, price stability and predictability over the medium to long term.” Subscribe Show comments Autoload comments