NERSA's Version 03 Electricity Trading Rules have introduced sweeping changes to bilateral PPA architecture — and with Eskom's court challenge stayed but not withdrawn, SAWEM's launch delayed to 2027, and non-bypassable charges still unresolved, every C&I buyer signing a wheeled supply agreement in Q4 2026 must urgently stress-test their counterparty risk and settlement mechanics.

The Regulatory Wildcard That Every C&I Buyer Must Price Into Any PPA Signed in Q4 2026

South Africa's commercial and industrial (C&I) electricity buyers are navigating a deal environment that has quietly become one of the most legally complex in the country's energy history. At the centre of it sits NERSA's Version 03 of the Draft Rules for Electricity Trading — a document that, once gazetted, will define who can sell you wheeled power, how settlement works, and whether the trader standing between you and a renewable generator is a creditworthy counterparty or a regulatory liability waiting to be litigated out of existence.

At SolarXgen, we are signing, stress-testing, and in some cases deliberately not signing wheeled supply agreements right now. Here is what our project teams are seeing on the ground — and what the verified regulatory record says every procurement team must understand before Q4 2026 closes.

What Version 03 Actually Changes

NERSA's updated draft rules were significantly expanded and revised to incorporate stakeholder comments made during the initial consultation process, with the regulator describing them as establishing "a comprehensive regulatory architecture designed to enable the phased implementation and operationalisation of bilateral electricity trading arrangements."

The latest draft is more detailed and market-focused than the previous version, with important concepts such as direct supply agreements, electricity trading agreements, virtual wheeling, top-up customers, and balance responsible parties now clearly defined. That definitional clarity matters enormously for PPA drafters: for the first time, the treatment of a "top-up customer" — a C&I buyer who still draws partial supply from the grid — has a regulatory home, reducing the ambiguity that has plagued force majeure and shortfall clauses in bilateral PPAs to date.

The Draft Rules also provide clearer timelines and procedures for reconciling energy transactions between traders and network service providers. The treatment of wheeling credits, top-up energy, and non-bypassable charges has also been expanded. For any C&I buyer with a wheeled solar or wind supply agreement, these three items — wheeling credits, top-up access rights, and the quantum of the non-bypassable charge (NBC) — are now the primary financial variables that determine whether your all-in delivered cost of electricity lands where your model said it would.

The Non-Bypassable Charge: The Number Nobody Can Pin Down Yet

The NBC is the structural charge that every customer switching to a private trader must still pay into the network — covering Eskom's stranded costs, residential cross-subsidies, and system-wide obligations. When a factory buys power from a private trader instead of Eskom, it still pays a mandatory charge that contributes to Eskom's stranded costs, cross-subsidies for residential customers, and other system-wide obligations.

What the August comment window was really settling is whether the non-bypassable charge lands somewhere all parties can live with. Set it too high and traders have no margin to compete on. Set it too low and Eskom carries the cost of a network everyone uses. Every other question in the document depends on that one, and the answer determines whether South Africa's market opens in 2026 or in court.

For C&I buyers structuring a 10- to 15-year PPA today, this is not an abstract regulatory debate. It is a price floor risk. Any fixed-price or indexed wheeled supply agreement signed before NERSA gazettes the final NBC methodology contains an unhedged cost variable that could erode the economic case for switching entirely. Buyers must ensure their PPAs contain NBC pass-through provisions — or they are absorbing a regulatory unknown that their lawyer and their CFO cannot currently quantify.

Eskom's Court Challenge: Stayed, Not Withdrawn

The trader counterparty risk picture is further complicated by Eskom's ongoing, if suspended, High Court challenge. Eskom filed a court challenge in July 2025 against five trading licences NERSA had approved, on the grounds that competition had been permitted before the rules governing it were finalised. The utility and the licensed traders agreed in early 2026 to pause that litigation so the rule-making could run its course.

The traders who NERSA granted licences to are Green Electron Market (Pty) Ltd, CBI Electric Apollo (Pty) Ltd, GreenCo Power Services (Pty) Ltd, Discovery Green (Pty) Ltd, and NOA Group Trading (Pty) Ltd. These five entities are the very counterparties through whom many bilateral wheeled PPAs are currently being structured. Following a period of constructive engagement, the parties jointly agreed to stay the review application. "This agreement does not constitute a withdrawal of the review application but rather a procedural stay, pending the finalisation of the applicable regulatory framework," the parties said, adding that the decision was taken to allow space for ongoing regulatory processes to proceed without parallel litigation.

Eskom and the licensed traders agreed in early 2026 to pause the litigation specifically to allow NERSA's rule-making process to run its course; if the finalised rules don't adequately address Eskom's underlying objections — particularly on non-bypassable charges and the pace of market opening — the utility has kept the option of reviving the case.

The practical implication for a C&I buyer: if you are signing a PPA where a licensed trader is the supply counterparty, you must conduct legal due diligence on what happens to your supply agreement if that trader's licence is reviewed and set aside. Change-in-law clauses, licence-condition-precedent provisions, and step-in rights for the underlying generator are no longer optional drafting niceties — they are essential risk mitigation.

Traders Locked Out of SAWEM in Phases 1 and 2

A further structural risk buried in Version 03 concerns wholesale market access for licensed traders themselves. Licensed electricity traders will not be allowed to buy or sell electricity directly in SAWEM during Phases 1 and 2 of market reform. Traders may only apply to participate from Phase 3, which cannot begin until SAWEM has been operating for at least three years. This restriction may limit traders' ability to manage risk, access wholesale prices, and compete effectively with established distributors.

This matters for PPA settlement mechanics. A trader who cannot access the wholesale market for balancing and top-up cannot efficiently hedge imbalance risk — and that cost ultimately travels downstream to the C&I offtaker, either through higher PPA pricing or through poorly drafted settlement shortfall clauses.

SAWEM's Delayed Launch Extends the Uncertainty Window

The National Transmission Company South Africa (NTCSA) has confirmed that the target date of April 1, 2026, for the launch of the South African Wholesale Electricity Market (SAWEM) was not met. The first phase is currently likely to go live in April 2027.

According to NECOM, the SAWEM design will initially facilitate bilateral trading between generators and large customers, expanding later to full market operations where electricity can be traded in real time, similar to European and North American markets. In preparation for participation in SAWEM, energy traders in South Africa are focused on aggregating power by incorporating batteries and energy storage, while looking to secure access to renewable energy projects in different regions of South Africa and Southern African countries.

Version 03 of the draft rules continues to allow Eskom Distribution and municipal distributors to act as the default retailers during the first two phases of market reform, meaning that in the near term, the incumbent distribution model remains dominant — and the competitive advantage of a licensed trader PPA is narrower than many buyers assume.

What SolarXgen Is Doing About It

Our project development and legal teams have adopted a four-point protocol for every wheeled supply mandate we are currently engaged on:

NBC Pass-Through Clause: All new PPA templates include an explicit mechanism to pass through changes in the non-bypassable charge to the offtaker, with a renegotiation trigger if the NBC exceeds a defined threshold above the modelled base case.
Trader Licence Condition Precedent: No commercial close proceeds until the trader counterparty's licence has been confirmed as unchallenged — or until the parties have agreed on a generator step-in mechanism if the licence is set aside.
Wheeling Agreement Annexure Audit: We require clients to provide all executed wheeling agreements for independent review, specifically checking for non-bypassable charge allocation, imbalance risk assignment, and curtailment compensation terms.
SAWEM Phase 3 Optionality: For deals with 10-year-plus tenors, we are building in review rights at the point SAWEM Phase 3 opens, to allow the parties to restructure settlement mechanics if wholesale market access materially changes the economics.

The Reporting Burden Is Also a Counterparty Risk Signal

Traders will be required to submit reports, including copies of various commercial agreements, to NERSA every six months. Many market participants are likely to view these obligations as administratively burdensome and potentially intrusive, particularly where commercially sensitive information must be disclosed.

From a counterparty risk perspective, this is a useful filter: a trader who cannot demonstrate operational readiness for NERSA's reporting regime is unlikely to be a reliable long-term PPA counterparty. In our due diligence process, we now ask prospective trading counterparties directly how they are preparing for bi-annual compliance submissions — and treat vague answers as a red flag.

Bottom Line for Q4 2026

NERSA's Version 03 Trading Rules are the most consequential regulatory document in the C&I electricity market today. The proposed rules are likely to be particularly closely scrutinised by licensed electricity traders and Eskom, but have implications for all participants in the electricity supply industry. South Africa's Electricity Regulation Amendment Act came into force on 1 January 2026, creating the legal framework for a multi-year transition to a competitive electricity market — but the operational detail that governs how that market actually functions in bilateral PPA terms remains in draft.

C&I buyers who sign wheeled supply agreements in Q4 2026 without stress-testing against the Version 03 framework — particularly on NBC exposure, trader counterparty litigation risk, and SAWEM Phase 3 participation rights — are accepting regulatory risk that has not been priced into their models. The rules are not yet gazetted. The court challenge is not yet withdrawn. The market is not yet live. In that gap lives the wildcard.

At SolarXgen, we are building that wildcard into every deal we touch. We recommend every C&I procurement team does the same.