Issue 198, Jan 2026

Roundup of major energy and electricity news and developments: 5 January to 18 January 2026

1. Legal challenges loom over Eskom’s threat to cut off unregistered home solar users.

2. Eskom’s mixed messaging on electricity trading licences deepens credibility gap.

3. Government bends rules to salvage energy-intensive industries amid Eskom cost crisis.

4. Municipal electricity failure poses structural economic risk beyond local government.

5. Chaos as tariff bungles force NERSA to redo electricity price determinations across SA.

6. Mounting criticism of lack of NTCSA independence and stalled electricity market code.

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1. Legal challenges loom over Eskom’s threat to cut off unregistered home solar users.

Eskom’s campaign to compel residential customers with rooftop solar PV to register their systems by 31 March 2026 is drawing growing resistance from civil-society groups, who argue that the utility is overreaching its legal authority and using threats of disconnection to force tariff migration. Under the campaign, Eskom is urging customers with small, grid-tied systems installed behind the meter to register their solar PV installations. While Eskom has temporarily waived R10,000 of registration and tariff conversion costs for systems below 50 kVA, critics say the real consequence lies elsewhere: customers on the Homelight prepaid tariff, which has no fixed monthly charge, are effectively being forced onto the Homeflex time-of-use tariff. Homeflex includes a significant fixed monthly component and requires a sophisticated bi-directional smart meter capable of time-of-use metering. Civil-society organisations argue that this requirement is being imposed even where customers do not export electricity into the grid and do not seek any form of compensation from Eskom for this. Civil-society organisations are disputing the lawfulness of Eskom’s actions, describing the threats of disconnection as “an unlawful overreach and abuse of authority”. OUTA argues that existing legislation explicitly excludes small residential systems installed behind the meter from Eskom’s interpretation of registration and permission requirements, and that a valid electrical Certificate of Compliance (CoC) is sufficient proof of safety and legality. The South African Photovoltaic Industry Association (SAPVIA) has meanwhile launched a parallel campaign promoting safe and compliant residential solar installations, seeking to calm growing anxiety among homeowners. With Eskom insisting that non-registration may result in supply termination, pressure groups are encouraging affected customers to resist and are signalling that legal action may follow to test the limits of Eskom’s powers.

2. Eskom’s mixed messaging on electricity trading licences deepens credibility gap.

Eskom’s insistence that it has “stayed” its High Court challenge to electricity trading licences is facing mounting scepticism, as evidence confirms that its legal action is continuing despite repeated public assurances by Eskom to the contrary. The dispute centres on Eskom Distribution’s review application challenging the decision by the National Energy Regulator of South Africa (NERSA) to grant electricity trading licences to several private companies. These licences are widely seen as a cornerstone of electricity market reform and a precursor to the introduction of a competitive wholesale electricity market. While Eskom has publicly indicated that it paused the court case to allow regulatory processes – including the development of new electricity trading rules – to proceed unhindered, a court directive issued in October 2025 records Eskom confirming that it is in fact proceeding with its review application. That disclosure sits uneasily with Eskom’s public narrative of cooperation, restraint and a stayed legal action. Eskom has sought to explain the contradiction by arguing that it was compelled to continue participating in court processes after some of the licensed traders allegedly refused to agree to a formal stay of proceedings. However, the affected trading companies have rejected this assertion, denying that they forced Eskom’s hand or demanded the continuation of the litigation. Critics argue that Eskom’s explanation rings hollow. Even if procedural steps were unavoidable, they say Eskom could have made its position explicit and transparent, rather than presenting the litigation as effectively dormant while in fact it remained active before the court. The controversy comes as NERSA has extended the public comment period on its draft electricity trading rules to the end of January 2026, indicating commitment to the reform process. Analysts warn that Eskom’s mixed signals risk eroding confidence in regulatory certainty and deterring new entrants at a critical juncture in South Africa’s electricity market transition.​​

3. Govt bends rules to salvage energy-intensive industries amid Eskom cost crisis.

South Africa’s ferrochrome industry – hobbled by Eskom’s rapidly rising electricity costs, a stronger Rand and global commodity prices – is at the centre of a high-stakes regulatory intervention as the National Energy Regulator of South Africa (NERSA) invites public comment on a temporary electricity price relief application lodged by Eskom through negotiated pricing agreements (NPAs) with major smelters. The consultation period is open ahead of a public hearing and a decision expected in the first quarter of 2026. Electricity accounts for around 35 – 40% of ferrochrome production costs, making South African smelters less competitive against other producers and contributing to local furnace idling and job losses. NERSA notes that hardship declarations were made by Samancor and the Glencore-Merafe Chrome Venture in 2025 under NPA take-or-pay provisions, prompting Eskom to seek temporary tariff relief for 12 months to keep these operations viable. The tariff adjustment request forms part of broader government efforts to avert industrial collapse. Trade, Industry & Competition Minister Parks Tau has amended antitrust regulations to enable distressed smelters to collaborate on securing cheaper or alternative power supplies – a departure from traditional competition law designed to prevent collusion among competitors but now relaxed to address the energy cost crisis. The push for relief comes amid warnings that prolonged elevated power prices have pushed several smelters to the brink, with thousands of potential job losses if plants remain shuttered. Government and industry stakeholders are also exploring alternative arrangements, including shared generation and tariff support mechanisms to bolster the sector while balancing impacts on other electricity consumers. Public submissions on Eskom’s application close later this month, with the outcome likely to shape the future of South Africa’s energy-intensive export industries and their contribution to jobs and beneficiation.

4. Municipal electricity failure poses structural economic risk beyond local government.

South Africa's electricity crisis is increasingly being driven not by power generation shortfalls, but by the deepening failure of municipal electricity distribution – a problem analysts warn has become a structural economic risk with national consequences. While municipal electricity problems are often framed as localised issues – failing councils, weak billing systems, political interference and a culture of non-payment – recent analysis suggests the reality is far more systemic. Municipal electricity failure now threatens investment, economic growth, employment and the financial sustainability of the entire electricity value chain. Municipalities distribute roughly 40% of electricity sold in South Africa, making them a critical interface between the power system and the economy. Persistent under-maintenance of ageing networks, high technical and non-technical losses, and widespread revenue leakage have left many municipal distributors unable to deliver reliable supply or fund essential infrastructure renewal. The result is rising outages, deteriorating power quality and mounting safety risks. The impact extends well beyond municipal balance sheets. Businesses face rising costs and uncertainty, discouraging expansion and new investment. As electricity reliability declines, commercial and industrial customers increasingly turn to self-generation, with eroding municipal sales volumes thus accelerating a destructive revenue spiral. Poorer households, meanwhile, are left exposed to escalating tariffs and declining service quality. The crisis also feeds directly into the financial distress of Eskom, as municipal arrears continue to grow, weakening the utility’s cash flow and complicating national electricity reform efforts. Analysts argue that incremental fixes will no longer suffice. Without structural reform of electricity distribution – including institutional restructuring, credible regulation, sustainable tariffs and improved governance – municipal electricity failure risks becoming a binding constraint on South Africa’s economic recovery. What is emerging, they warn, is not merely a local government problem, but a systemic fault line running through the economy itself. 

5. Chaos as tariff bungles force NERSA to redo electricity price determinations across SA.

Soith African electricity customers in Johannesburg, Ekurhuleni, Madibeng and Msunduzi are set to endure continued tariff uncertainty after the energy regulator, NERSA, conceded that its 2024/25 electricity pricing determination for these municipalities (as well as many others) contained material errors and must be redone. The Regulator announced it will reopen the consultation process on the redetermination for the four municipal distributors after acknowledging “significant issues” in the methodology used to calculate the new tariffs. Retailers and civil society groups had flagged concerns that the NERSA determinations for the four municipalities contained flawed cost allocations and unsupported assumptions without cost of supply studies that could unfairly shift costs onto consumers. The judge ruled last week that the 2024/25 municipal tariffs of the four municipalities were set aside, and the process to determine the tariff must begin again from scratch, for completion by 30 June 2026. In a separate matter, the widely reported R54bn settlement, that was reached behind closed doors between NERSA and Eskom as a result of a R107bn “mistake” by NERSA in respect of Eskom’s allowed revenue in the MYPD6 determination for Eskom’s 2025/26, 2026/27 and 2027/28 financial years, was set aside by the courts. Eskom has since increased its demand from the initial R54bn settlement reached with NERSA to R76bn, signalling even further electricity price increases to customers across South Africa as Eskom claws back revenue from customers through increase electricity tariffs in coming years as a result of the NERSA “mistake”. Critics argue that the tariff bungles erode consumer confidence in the regulatory framework and indicate broader challenges in South Africa’s electricity pricing architecture, where technical complexity and stakeholder mistrust intersect to produce regulatory missteps at a time when affordability remains a critical national concern.

6. Mounting criticism of lack of NTCSA independence and stalled electricity market code.

Eskom unbundling process and electricity market reforms are facing rising criticism from industry associations, analysts and stakeholders over revised policy positions affecting the independence of the National Transmission Company South Africa (NTCSA) and delays in approving the electricity market code, which together risk undermining confidence in the integrity and independence of the fledgling market framework. Central to the controversy is the revised unbundling plan for Eskom, which leaves the NTCSA as a subsidiary of Eskom Holdings while a separate Transmission System Operator (TSO) is established outside the group. Critics warn that this approach could preserve undue influence by Eskom on the transmission entity and stymie critical grid investment. The South African Photo-Voltaic Industry Association (SAPVIA) has expressed concern that the revised unbundling strategy may weaken neutral governance and investor confidence at a time when transparent market structures are essential to attract renewable capacity. SAPVIA argues that without genuine operational independence for the NTCSA – both financially and in decision-making – market participants could be disadvantaged and competition blunted. Further adding to industry unease is the delay by the Eskom and NTCSA boards in finalising, approving and submitting the market code – a foundational legal and regulatory instrument that will govern trading, dispatch and settlement mechanisms under the South African Wholesale Electricity Market (SAWEM) – to NERSA to enable the Regulator to commence with its approval processes which include stakeholder consultations and public hearings. Observers warn that delays in approving the market code threatens market readiness and clarity, potentially slowing reform momentum and deterring new entrants. Stakeholders are now urging NERSA and government to reinforce the NTCSA’s autonomy and prioritise market code finalisation, stressing that credible institutional independence and clear market rules are indispensable to avoid reform fatigue and sustain investor trust.

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