The pricing architecture of electricity is about to change after President Cyril Ramaphosa signed into law last week amendments to the Electricity Regulation Act. This is a game-changer as it would introduce much-needed competition in the electricity market.

Listen to this article 6 min Listen to this article 6 min It is safe to say that South Africa's 16-year-long electricity shortage crisis is over. The performance of Eskom's power stations has recovered, allowing it to generate electricity to meet the country's demand. The power utility is, in fact, now generating so much electricity that it doesn't know what to do with it all.

Households and businesses have been accustomed to dealing with blackouts, with many installing rooftop solar as a backup, also easing pressure on the electricity system.

There was a boom in rooftop solar installations in 2023, which has now slowed down because Eskom has managed to keep the lights on for nearly four months, as my colleague Ed Stoddard writes here.

Although the Eskom blackout crisis has ended, another crisis persists -- the mess that remains in the pricing of electricity. This crisis will take months to fix.

For 100 years, Eskom had a monopoly on electricity generation, distribution and transmission. This monopoly gave Eskom the power to design electricity prices and propose increases that were unpredictable and more than double the prevailing inflation rate.

Of course, electricity prices are regulated by the National Energy...