Energy regulator Nersa wants to stop fully automated trading on South Africa’s new wholesale electricity market for its first five years, TechCentral reported.
The plan is part of an 87-page draft framework for the trading platform of the South African Wholesale Electricity Market, known as Sawem. Nersa has published the document, called the Electricity Trading Platform Regulatory Framework, for public comment.
“Automated algorithmic trading systems used by market participants to submit bids and offers without manual review are not permitted to interact with the trading platform during the initial phase of Sawem’s operation,” the draft states.
The draft says this first phase runs from the commercial launch of the market until five years later.
The ban would block the kind of software that traders and large buyers in older power markets use. Those systems place bids and react to price changes on their own. Market participants and the system operator will still be able to connect to the platform through its application programming interfaces.
Nersa said it would review the ban “based on the market’s operating experience and the maturity of the trading platform’s risk controls”. A consultation paper asks the public whether the ban is “an appropriate transitional measure”.
The draft accepts that automated systems “can improve market efficiency and operational responsiveness”. But it warns that without proper oversight, they could harm fair competition, market integrity and the smooth running of the system.
Nersa licensed the National Transmission Company South Africa (NTCSA) as the market operator in November 2025. According to the draft, the NTCSA cannot simply switch the platform on.
“Holding an MO (market operator) licence does not, in itself, authorise the commencement of commercial market operations through the trading platform,” the draft says.
The platform would first have to pass six approval stages. These are design approval, factory testing, integration testing, market simulation, a pilot run and commercial approval. Nersa may combine, skip or change some of these stages.
The regulator must also approve every algorithm used for market clearing, dispatch scheduling and settlement. This applies before the algorithm is used and every time it is changed.
Under the draft, the platform must be available 99.9% of the time during trading windows. It must face independent penetration testing at least once a year. These are simulated attacks used to find security weak spots. Important market data must be kept for at least five years.
If a serious incident happens, such as an outage during a trading window, Nersa must be told right away. The operator must then switch to manual processes within an hour.
Even moving to a different cloud provider or data centre counts as a “material change”. Nersa must be told about such a move in advance, and it may need the regulator’s approval.
For now, both the market operator and system operator functions sit inside the NTCSA. Data shared between them must follow ring-fencing and isolation rules set out in the market operator’s licence.
Sawem was first meant to launch on 1 April 2026. The NTCSA later moved the date to the third quarter of 2026. Engineering News has since reported that the market is now due to start in April 2027. The NTCSA is also setting up a market surveillance unit before the launch.
Rules for bilateral electricity trading have also not been finalised. Eskom objected to Nersa’s first draft, published in November 2025. The regulator released revised rules for comment in June and later extended the deadline to 28 September.
Eskom CEO Dan Marokane said in July that the rules were close to being released.
Written comments on the trading platform framework close at 4pm on 31 October. A virtual public hearing will take place on 19 November, and registration for it closes at 4.30pm on 12 November.
Source: this article is based on reporting by TechCentral. Image: TechCentral. Written with the help of AI and published by the Tzaneen Voice Technology desk. See our Editorial Standards.
Werner Jacobs covers technology for Tzaneen Voice. Werner reports on mobile networks, data prices, internet access, smartphones, apps, AI, cybersecurity and South African tech companies. Each story explains what a new product, price change or policy means for ordinary users in South Africa.