Energy regulator Nersa wants to keep fully automated trading off South Africa’s new wholesale electricity market for its first five years.
The proposal is contained in an 87-page draft framework for the platform on which participants will trade in the South African Wholesale Electricity Market (Sawem). Nersa has published it for public comment as the Electricity Trading Platform Regulatory Framework.
“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. It defines that phase as “the period from commercial launch until five years”.
That would rule out the software traders and large buyers in mature power markets use to bid and respond to price changes automatically. Participants and the system operator can still 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”, and a consultation paper asks stakeholders whether it is “an appropriate transitional measure”. The draft concedes that automated systems “can improve market efficiency and operational responsiveness” but warns that without proper governance they could pose risks to market integrity, competition and operational stability.
Licence is not enough
The National Transmission Company South Africa (NTCSA), which Nersa licensed as market operator in November 2025, 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.
Instead, the platform would have to clear six accreditation stages: design approval, factory acceptance testing, integration testing, market simulation, pilot operation and commercial approval. Nersa may combine, waive or adjust stages, and must approve every market-clearing, dispatch-scheduling and settlement algorithm before it is deployed or changed.
The platform must be available 99.9% of the time during trading windows, undergo independent penetration testing – simulated attacks to find security weaknesses – at least once a year and keep material market data for at least five years.
A critical incident, such as an outage during a trading window, requires immediate notification to Nersa and a switch to manual processes within an hour. Even moving to a different cloud provider or data centre counts as a “material change” that must be notified to Nersa in advance and may need its approval.
Data exchange between the market operator and system operator functions, both housed in the NTCSA for now, is subject to ring-fencing and isolation requirements in the market operator’s licence.
Launch slips to 2027
Sawem was originally due to launch on 1 April 2026. The NTCSA later moved the launch to the third quarter of 2026. That target has also slipped: the market is now due to begin operating in April 2027, Engineering News reported last week, and the NTCSA is setting up a market surveillance unit ahead of the launch.
Rules for bilateral electricity trading are also still in flux. After Eskom objected to Nersa’s first draft, published in November 2025, the regulator put revised rules out for comment in June and later extended the deadline to 28 September. Eskom CEO Dan Marokane said in July that the rules were imminent. They have still not been finalised.
Written comments on the trading platform framework close at 4pm on 31 October. A virtual public hearing is set for 19 November, with registration closing at 4.30pm on 12 November. – © 2026 NewsCentral Media
