South Africa’s Energy Market Opens Up – Why Large Users Need to Act Now – African Business Innovation

As South Africa’s electricity market shifts from monopoly control to open access, businesses are being asked to make decisions that could define their competitiveness for decades to come. Yet many are still uncertain about how, or when, to act.

According to Gerjo Hoffman, CEO of Open Access Energy, the challenge is not just technical or financial, but structural. “For the first time, companies can choose how they buy power. But that freedom also brings complexity, and getting it wrong can lock in high costs for years.”

For decades, large power users such as mines, manufacturers and data centres had little choice in where their electricity came from. They were tied to a single supplier, a single tariff, and limited control over risk. The liberalisation of South Africa’s electricity market,  allowing power to be traded and wheeled across the grid,  has changed that completely.

“Energy is no longer just a utility bill,” says Hoffman. “It’s a strategic procurement decision. The energy choices companies make today will determine how competitive they are tomorrow.”

This shift has opened new opportunities for independent power producers (IPPs) and traders, but it has also placed pressure on energy buyers to navigate an unfamiliar landscape. Many companies are now faced with deciding whether to build their own generation capacity, or to buy electricity from the market through mechanisms such as wheeling.

While onsite generation, such as rooftop solar, can be a good first step, it often comes with limits,  in scale, capital investment, and long-term flexibility. Wheeling, by contrast, allows companies to access renewable energy from multiple large-scale projects located anywhere in the country, without tying up capital in physical assets.

“It’s about unlocking choice,” Hoffman explains. “When you separate generation from consumption, you can optimise for price, reliability and sustainability across your operations, not just at one site.”

But choice without transparency can be risky. Energy procurement has traditionally been a closed process, with limited access to comparable data and inconsistent pricing. That’s where Open Access Energy has been developing tools and systems designed to make the buying process more transparent and efficient, helping large energy users make informed, risk-aware decisions in a market that is still maturing.

“Our goal isn’t to just sell a product,” says Hoffman. “It’s to help buyers understand their options, compare suppliers on equal terms, and structure deals that make sense for their business. The market is opening fast, and those who understand how to participate will have a clear advantage.”

The benefits of acting early are not only financial. Eskom’s tariffs have risen by nearly 190% since 2014, far exceeding inflation, while load-shedding has cost the economy an estimated R900 million per day in lost output. At the same time, South Africa faces an energy supply shortfall of around 4–6 gigawatts, even as more private generation projects, now exceeding 5 GW in registered capacity,  enter the grid.

Companies that secure supply through structured market deals today are likely to benefit from greater price stability in the years ahead. In addition, early adopters are well placed to meet environmental, social and governance (ESG) goals, a growing requirement for investors and international customers. Industrial and mining users, who collectively account for nearly 60% of national electricity demand, are especially positioned to drive this change.

As Hoffman points out, this is not just an energy story,  it’s an economic one. “When businesses can manage energy costs better, they can invest more in growth, in jobs, and in innovation. That’s the bigger picture here.”

For South Africa, the transition to a more open, technology-driven energy market represents a turning point. It’s an opportunity to build resilience and competitiveness into the country’s industrial base while accelerating the shift toward cleaner power.

Hoffman believes that progress in the energy market will depend on transparency and collaboration. “South Africa’s energy future won’t be shaped by capacity alone,” he says. “It will be shaped by how effectively buyers and sellers use data and insight to make smarter, more sustainable choices.”

As the market opens, those choices must be made now. The companies that act early, by exploring wheeling options, engaging transparently with suppliers, and adopting data-driven procurement strategies, will shape South Africa’s next energy chapter. Open Access Energy is helping large users take that step with confidence, ensuring that every deal contributes not only to business performance but to a stronger, more sustainable energy future for the country.