African Governments Rewrite Power Rules as Private Generation Reshapes Electricity Markets Fast

African governments are revising electricity rules as private generation, wheeling and decentralised power reshape utility markets.

South Africa accounted for half of six policy developments tracked in August, including a revised electricity pricing policy.

A separate Chinese battery tax also shows how global industrial policy can alter Africa’s clean energy costs.

Private Power Outpaces Legacy Market Rules

Africa’s electricity markets are changing faster than many of the rules governing them

The growth of private generation and wheeling, where power is transported across a network for sale to another customer, is pushing governments to reconsider tariffs, utility roles and the structure of the power sector.

Renewables Rising tracked six policy and regulatory developments announced in August 2026, with South Africa accounting for half.

• The pattern suggests that decentralisation is no longer a future scenario.
• Businesses and households are already changing how electricity is generated, purchased and consumed, and public institutions are trying to catch up.

South Africa Moves Toward Clearer Pricing

One prominent development is South Africa’s Revised Electricity Pricing Policy.

• It seeks to separate tariffs across the electricity value chain and move toward more cost-reflective pricing.
• Unbundling the bill can make the costs of generation, transmission, distribution and related services easier to identify.

That transparency matters when a customer buys electricity from a private producer but still relies on the public network.

• A utility may sell fewer kilowatt-hours while continuing to maintain wires, balance supply and provide backup.
• If tariffs recover all network costs through energy sales alone, customers who can generate their own power leave a growing share of fixed costs to those who cannot.
• If access charges are too high or unpredictable, however, private investment and wheeling can stall.

The policy challenge is therefore to price services, risks and public obligations separately and fairly.

• Regulators need reliable cost data, protection for low-income households and clear rules for network access.
• Utilities, in turn, need business models that reward connection, balancing and system reliability rather than depend only on selling centrally generated electricity.

Global Policy Shifts Reach African Projects

The regulatory catch-up is not confined to Africa.

• China introduced a 2% consumption tax on lithium-ion and several other battery types from September 1, 2026, with the rate scheduled to rise to 4% in September 2027.
• Sodium-ion, solid-state, and fuel cell technologies remain temporarily exempt through the end of 2028.

Because Chinese manufacturers are central to global battery supply chains, even a modest tax change can influence procurement, contracts and technology choices for African storage and electric mobility projects.

The final impact will depend on product classification, exports, deductions and who absorbs the costs; however, it reinforces the need for developers to monitor industrial policy outside the markets where projects are built.

Regulators Need Data and Social Guardrails

African regulators should publish transparent tariff methodologies, standardise wheeling agreements and define how utilities recover legitimate network costs.

• Reforms need public consultation and independent testing against affordability, competition and reliability goals.

Implementation should be sequenced.

• Regulators can begin with transparent connection charges, network use tariffs and settlement rules for large customers, then refine them as metering and market data improve.
• Performance standards should make utilities accountable for outages, connection delays and losses, so cost-reflective tariffs do not become a one-sided request for higher revenue. Social tariffs and targeted support should protect vulnerable households more effectively than opaque cross-subsidies that weaken utility finances.

Regional power pools can also benefit from compatible wheeling and settlement rules.

• Greater consistency would help developers sell across borders, improve the use of variable renewable energy and reduce the need for each market to hold expensive reserves alone.

Governments should also monitor battery and equipment policy across major supplier markets, diversify procurement where practical and avoid sudden local rules that add uncertainty.

• Utilities can remain valuable in decentralised markets, but only if regulation recognises the services they provide and protects customers who have the least ability to leave the grid.

Path Forward – Aligning Power Regulation With Market Reality

African governments should separate generation, network and public service costs, publish predictable wheeling rules and protect low-income consumers throughout tariff reform.

Utilities need incentives to provide reliable network services in a decentralised market.

Developers and policymakers must also track global supply chain measures, including battery taxes and technology incentives.

Coordinated, evidence-led regulation can expand private investment without shifting unfair costs onto customers who remain dependent on the grid.

Culled from: Policy update: Governments play catch-up to market realities