South Africa’s energy shifting energy and the opportunities the change offers was discussed at the recent industry showcase that took place at the Ener-G-Africa (EGA) solar manufacturing facility in Paarl.
South Africa’s electricity system is starting to shift from an Eskom monopoly to a more competitive energy marketplace, where electricity could eventually be sold by multiple providers – much like airtime (Image source: © 123rf
123rf)
Speaking at the showcase, energy analyst Chris Yelland describes what he sees as a structural shift in South Africa’s electricity market.
The South African model of buying electricity is shifting from a relatively simple exercise, but with few options and little or no choice to opportunities on offer for local players to join a growing energy marketplace.
“We’re moving away from a vertically integrated Eskom monopoly and geographic municipal electricity distributor monopolies towards a far more diversified, competitive and unbundled market.
He adds that the implications of that shift extend well beyond generation capacity.
“They point to the emergence of something South Africa has not previously had in electricity: a competitive retail energy marketplace.”
The airtime analogy
Yelland compared energy to airtime.
For South Africans, purchasing airtime is fairly easy – you can purchase it directly from your telecom provider, from your bank’s app, from a supermarket till point, or from a small corner shop.
The underlying infrastructure may be complex, but from the consumer’s perspective, there is choice, competition and flexibility.
As regulatory reform progresses, distributed generation expands and wholesale markets begin to take shape, Yelland says we are likely to see the emergence of energy traders and retailers operating alongside traditional distributors.
“We are likely to see the emergence of a competitive retail energy sector, with experienced retailers entering alongside dedicated energy traders,” he says.
In time, we may see supermarket groups, financial institutions and specialist energy companies offering tailored electricity products to different market segments.
The growth of distributed generation
EGA's CEO Andre Moolman agrees that this is a logical consequence of structural reform, technology change and market pressure, and says that as a local solar manufacturer, the company hopes to play a significant role in this burgeoning sector.
“South Africa’s energy system is evolving at the same time that cost pressures are intensifying,” says Moolman.
“Recent tariff decisions from Nersa have confirmed further electricity price increases in the coming years.
“For households and businesses already grappling with rising input costs, this reinforces the need for reliable and economically viable alternatives.”
At the same time, he says, the growth of distributed generation is accelerating.
“Rooftop solar, commercial installations and behind-the-meter systems are no longer peripheral. They are becoming central to how electricity is generated and consumed.
“We are not simply adding renewable capacity to an old system. We are reshaping the system itself.”
Yelland argues that distributed generation has often been under-estimated in official projections.
He believes the timing is good for businesses positioned in this space, particularly those serving residential and commercial markets where installations can move faster than large-scale grid-dependent projects.
What this means for value
In a centralised monopoly, price is often the dominant consideration. In a competitive marketplace, Moolman says, value becomes multi-dimensional.
“One of the most practical insights Chris shared during our event was his framework for understanding customer value.
“In his view, customers evaluate a combination of factors: quality, responsiveness, service, delivery time and competitive pricing.
“Reduce delivery time, improve responsiveness and increase quality, and overall value rises, even if price is not the absolute lowest. This resonates deeply with our own experience,” says Moolman.
Many sources, one ecosystem
Yelland spoke about how South Africa’s future energy mix will not be defined by a single technology, saying that coal will not disappear overnight and gas, wind, solar, storage and distributed generation will all play a role.
He notes that there are many energy sources – the solution lies in how they work together.
Moolman comments on this, "For those of us building businesses in this space, the responsibility is clear. We must think beyond megawatts and consider how market design, retail innovation and supply chain resilience intersect.
“The energy transition is not only a technical shift. It is a commercial and structural one.”
