The South African Department of Electricity and Energy has introduced a revised electricity pricing policy (EPP) for 2026, which is currently open for public comment. The policy aims to create a fairer and more sustainable energy future by making electricity prices reflect the efficient cost of providing electricity while ensuring affordability and social equity. The revised EPP is crucial for every South African, as electricity pricing affects households and businesses alike.
The country's electricity sector has undergone significant changes since the 2008 electricity pricing policy was developed. The sector is moving towards an unbundled and increasingly competitive market, with independent power producers, municipalities, and private generators playing a greater role. Renewable energy, battery storage, embedded generation, and new technologies are also changing how electricity is produced, supplied, and consumed. The pricing framework must keep pace with this transformation.
At the heart of the revised EPP is a simple principle: electricity prices should reflect the efficient cost of providing electricity while ensuring affordability and social equity. The policy proposes a combination of state support for network capital costs, low connection fees, lifeline tariffs, and free basic electricity to protect vulnerable households. A national subsidy framework is also proposed to establish clear rules about who contributes to subsidies, who receives them, and how much support should be provided.
The revised EPP seeks to create a transparent and predictable pricing framework that can support investment in generation, transmission, and distribution infrastructure. The policy proposes that electricity bills provide a clearer breakdown of the different components of the electricity price, including energy, network, and service costs, as well as applicable subsidies and surcharges. This will allow consumers to understand their consumption and make more informed decisions about how and when they use electricity.
Predictability is another important reform proposed in the revised EPP. The National Energy Regulator of South Africa is expected to develop and publish a multi-year electricity price path covering at least five years, updated periodically and aligned with the country’s integrated resource plan. This will enable electricity users to plan, households to manage their budgets, businesses to make investment decisions, and municipalities to plan.
The revised EPP also aims to create a more open and competitive electricity system. Fair and non-discriminatory access to transmission and distribution networks will be essential as more customers procure electricity from different suppliers and as electricity wheeling expands. The objective is to ensure that the country’s electricity infrastructure can be used efficiently for the benefit of all participants.
The Department of Electricity and Energy encourages stakeholders, including consumers, businesses, municipalities, organised labour, industry bodies, civil society, researchers, and other stakeholders, to engage with the proposals and help shape the final policy. The revised EPP is not simply about changing tariffs; it is about creating the rules for a changing electricity sector.
Key points
- The policy aims to make electricity prices more transparent and predictable.
- A national subsidy framework is proposed to support vulnerable households.
- The policy seeks to create a more open and competitive electricity system.
