Energy minister Kgosientsho Ramokgopa has warned that moving too fast into a wholesale electricity market could collapse South Africa’s economy. He said Johannesburg would lose power if the market were already running.
Ramokgopa made the comments during a lecture at Wits Business School, TechCentral reported. He said the city’s monthly electricity bill is about R1.7-billion. Two missed payments would leave R3.4-billion unpaid.
“If the wholesale electricity market were in place today, Johannesburg would be off,” Ramokgopa said.
He explained that sellers in such a market would not supply power to buyers who do not pay. “So it means the Joburg residents are collateral damage,” he said.
Johannesburg started falling behind on its Eskom account in October 2023. The city said it had been overbilled. In August, it paid R5.26-billion in overdue debt after Eskom threatened to cut supply.
The planned South African Wholesale Electricity Market is known as Sawem. It will let power generators trade electricity, make direct deals with buyers, or sell to the National Transmission Company South Africa.
Distributors will be able to buy from a central purchasing agency or from other sellers. Ramokgopa described the system as “very complex”.
“I do caution that the speed with which we enter that market must be measured,” he said.
He said South Africans are often in a hurry. Other countries have run such markets for ten years, but South Africa wants to overtake them, he said.
“There’s a light there at the end of the tunnel, and it’s not because you are getting out of the tunnel. It’s an oncoming train, and we’re still proceeding,” he said.
He said entering the market carries real danger and could collapse the economy. “We’ll get there, but at the pace that we can afford,” he said.
Ramokgopa told the students he had come “more as a scholar”. He said some of his remarks “are not government policy”. He did not mark his market comments as personal views.
The minister also said new market players must help pay for free electricity for poor households. He said Eskom should not carry this cost alone.
“You can enter into a bilateral, but we are going to get you on the wheeling. There will be a fee that is meant for the social outcome,” he said. He did not say how big the fee would be.
Ramokgopa also wants Eskom freed from slow approval rules so it can compete with private companies. He said a private board can approve a purchase without meeting. At Eskom, the same decision could take four months, he said.
“Let the games begin, but the rules must be the same for everyone,” he said.
On regional trade, he said neighbouring countries face a power shortage of about 6GW. South Africa has an average surplus of about 4GW. His team estimated the country lost about R49-billion in possible income over a year.
The government plans to strengthen power links with neighbours to export the extra electricity. Ramokgopa said this will only happen once local demand and room for growth are secured.
Sawem was first meant to open on 1 April 2026, but the date moved to the third quarter. It is now due to start operating in April 2027.
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.