Engineering the future
And from left: Kiera Bracher, Sabeeha Loonat and Junaid Nyker (Associates) at Webber Wentzel.
Continued from page 29
Eskom challenges NERSA’s new wave of trading licences The private electricity trading landscape shied significantly in 2025 as the National Energy Regulator of South Africa (NERSA) granted a new wave of trading and import/export licences, signalling rapid liberalisation in the sector. Eskom responded by launching a judicial review to set aside five of these licences, arguing that NERSA was reshaping national energy policy without clear trading rules or adequate consultation. Although Eskom had raised no objections to similar licences issued over the past decade, it insisted that the absence of defined rules created regulatory uncertainty and risked ‘upending’ the existing distribution framework. Following ministerial pressure and NERSA’s decision to accelerate the publication of trading rules, Eskom has stayed its court action while participating in the rule-making process. The dispute has highlighted deep tensions around market reform, Eskom’s future role, and fears of customer ‘cherry-picking’ by electricity traders. The dra Trading Rules published by NERSA on 27 October 2025 for comment were formally withdrawn on 29 October 2025 and they remain withdrawn pending further consultation. Battery energy storage systems Within the transformed electricity regulatory landscape introduced by the ERAA coming into force, battery energy storage systems (BESS) have emerged as essential strategic assets for market participants, o ering critical risk mitigation and diversified revenue generation capabilities. The Market Code will impose significant financial penalties on Balance Responsible Parties for deviations between forecasted and actual energy production and consumption. BESS can smooth the output of intermittent renewable energy generation, ensure compliance, and e ectively convert a potential penalty liability into a predictable operational cost. BESS also enables power producers to sell dispatchable renewable energy, transforming intermittent generation into baseload supply, and to deliver energy according to o taker demand profiles rather than renewable resource availability patterns, commanding premium pricing in power purchase agreements. The government is on its third bid window in its Battery Energy Storage IPP Procurement Programme. As South Africa progresses towards May 2031, market participants need to recognise
BESS not as a future technology but as a present necessity for competitive success in the transformed electricity sector.
Prospective projects in o shore wind In 2025, South Africa’s o shore wind sector saw foundational work being done and preparatory initiatives, even as formal regulatory guidance remains pending. The DEE has indicated its intention to publish an o shore wind guideline to cover key areas, but the release has been delayed. Through 2026, government’s focus is expected to shi from preparatory activities to the formalisation and implementation of o shore wind projects. Key developments may include the expected launch of the DEE’s o shore wind guideline, strategic investor interest, and pioneering project announcements. South Africa’s oshore wind resources present significant growth potential. M&A and strategic partnerships As South Africa’s electricity market shis into competitive mode, 2026 may be a year of deal-making and portfolio realignment across the energy value chain. We expect to see increased activity in mergers, acquisitions and strategic joint ventures, as international investors and regional platforms look for scalable entry points. At the same time, established players are reassessing their portfolios, rebalancing asset mix, reallocating capital, and recalibrating exposure to new market risks. The centre of gravity is likely to be in cross border transactions, the consolidation of operating renewable portfolios, and restructuring to accommodate competitive trading and market price exposure. Sophisticated empowerment and governance structures will remain integral to deal execution, reflecting South Africa’s transformation agenda. For market participants, success will depend on navigating multi-jurisdictional complexity, aligning regulatory risk with transaction structures, and deploying capital e iciently in a rapidly liberalising electricity sector.
For more information visit: www.webberwentzel.com
30 Electricity + Control MARCH 2026
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