NTCSA Licensed as Market Operator, Advancing SA’s Competitive Power Market

The approval marks a significant milestone in the country’s transition from a monopolistic electricity system to a competitive, rules-based energy market.

South Africa has taken a decisive step toward reshaping its electricity future as the National Transmission Company South Africa SOC Ltd (NTCSA) received its official Market Operator Licence from the National Energy Regulator of South Africa (NERSA). The approval marks a significant milestone in the country’s transition from a monopolistic electricity system to a competitive, rules-based energy market.

In a statement on Thursday, the NTCSA hailed the licence approval as a breakthrough that will “establish a fair, competitive market for electricity in South Africa”, reinforcing government’s broader energy reform agenda.

NTCSA’s Expanding Role in the Power Sector

Established as a wholly owned subsidiary of Eskom, the NTCSA has already begun limited market activities since last year. Its responsibilities include:

• Owning and operating the national transmission grid

• Managing the System Operator, a globally benchmarked control centre responsible for grid stability

• Overseeing grid strengthening and expansion projects

• Administering energy market services, including settlements and trading support

The Market Operator Licence authorises the NTCSA to operate South Africa’s new electricity trading platform in line with the Electricity Regulation Amendment Act (ERAA), which lays out the legal foundation for the country’s future competitive market structure.

In March last year, NERSA approved the transfer of Eskom’s Section 34 Power Purchase Agreement (PPA) functions with Independent Power Producers (IPPs) to the NTCSA—another critical step in unbundling Eskom’s vertically integrated structure.

A Pivotal Step Toward a Competitive Electricity Market

NTCSA CEO Monde Bala welcomed the development, describing it as a “significant milestone” in South Africa’s evolving power sector.

“A competitive market will unlock economic and societal benefits over time by broadening participation, stimulating investment in new capacity, and enhancing long-term system resilience,” Bala said.

He also welcomed the establishment of the Electricity Market Advisory Forum (EMAF) and the newly approved Grid Capacity Allocation Rules, which are expected to ensure transparent, non-discriminatory access to grid infrastructure.

With the Market Operator now licensed, Bala confirmed that the company’s next major step is finalising the Market Code, a comprehensive rulebook governing the operation of the future electricity market.

Finalising the Market Code: Setting the Rules of the Game

The Market Code will specify:

• Trading rules

• Market operations processes

• Participant obligations

• Dispute resolution mechanisms

• System reliability and market performance standards

According to Bala, extensive stakeholder consultations have already been held to ensure the Market Code reflects broad industry input across generators, traders, municipalities, and independent producers.

Once submitted, NERSA will evaluate the code, issue conditions where necessary, and provide final approval.

The NTCSA said it is awaiting licence conditions and NERSA’s full reasoning, and will supply additional information about independence and conflict-of-interest safeguards as required under the market development roadmap.

Eskom Welcomes Progress on Market Reform

Eskom Group Chief Executive Dan Marokane praised NERSA’s decision to license the NTCSA as Market Operator, saying it demonstrates South Africa’s commitment to a transparent, globally aligned electricity market.

“It supports a level playing field for market participation and enhances certainty for investors looking to bring new capacity into the system,” Marokane said.

Eskom emphasised that the introduction of clear grid allocation rules and the functioning of EMAF will provide important reporting mechanisms and governance structures during the transition.

The utility described the approval as a “strong signal” to domestic and international investors that South Africa remains committed to a rules-based transition that opens the electricity sector to wider participation.

Legal Framework: ERAA Sets the Path Ahead

The Electricity Regulation Amendment Act (ERAA) is the central piece of legislation driving South Africa’s power sector restructuring. The law mandates:

• Creation of a fully independent Transmission System Operator (TSO) within five years

• Development of a competitive, multi-market electricity trading environment

• Unbundling of Eskom into separate generation, transmission, and distribution entities

Under the transitional arrangements, the NTCSA will perform several TSO functions until the fully independent operator is established.

Managing the Transition Responsibly

Eskom said it is working closely with government, labour unions, municipalities, and regulators through a structured engagement process to ensure:

• Grid and system stability

• Transparent communication

• Protection of workers

• Minimal disruption during the unbundling process

The utility has already moved from a single, vertically integrated structure to a group model with separate legal entities for generation, transmission, and distribution.

A New Era for South Africa’s Electricity Market

The licensing of the NTCSA as Market Operator marks a defining moment for South Africa’s electricity reform journey. It signals a shift toward:

• Greater competition among energy producers

• Increased investor confidence

• Modernised market governance

• Robust, transparent rules for electricity trading

• Long-term improvements in system resilience and planning

With the Market Code nearing completion and new regulatory structures in place, the country is steadily advancing toward a more open, diversified, and secure electricity supply future.