Failure to strike right tariff restructuring balance will undermine SAWEM

With preparations under way for the launch of the South African Wholesale Electricity Market (SAWEM) in 2026, new research highlights how decisions on the future regulated tariff structure, including the Megaflex bulk user tariff, could affect the market’s objectives of advancing competition and catalysing further investment. Conducted by financial advisory services firm Cresco, the analysis has been prepared in response to both approved changes to Eskom’s retail tariff plan by the National Energy Regulator of South Africa (Nersa) in early 2025, as well as possible future changes that could result in shifts in the composition of the tariff in relation to the variable and fixed cost components and time-of-use adjustments based on demand and energy supply changes.