By: Wessel Wessels - COO at Mzansi Energy Consortium and Founder and CEO of Journey2Green

NERSA’s draft Trading Rules have triggered predictable concern from renewable developers, traders, large customers and market commentators. Many see the framework as overly cautious - a system of volume caps, delayed market access and non-bypassable charges aimed at protecting incumbents rather than unlocking competition. That criticism is understandable, but incomplete.

Placed in Eskom’s position, many organisations might have done the same. A utility carrying legacy debt, social obligations, ageing infrastructure and a declining sales base will naturally prioritise revenue stability during transition. No responsible operator would accelerate structural risk without a plan to manage it.

The issue is not Eskom’s desire for stability. It is that the proposal risks securing short-term protection while missing a larger opportunity: mobilising private capital to strengthen stressed networks. The debate is too focused on limiting competitive supply and not enough on how renewable investment can reinforce the system-especially at distribution level, where many weaknesses sit.

The Wrong Fight
The debate is often framed as Eskom versus independent power. That is the wrong lens. South Africa does not have too much renewable investment; it has too little generation diversity, constrained grid capacity, ageing municipal infrastructure and insufficient capital to modernise networks.

Commercial and industrial customers pursuing wheeling are not ideological actors. They are responding to rising tariffs, reliability concerns and infrastructure uncertainty. Regulation can either resist this reality or shape it.

Why Containment Will Underperform
A containment-focused framework risks slowing investment decisions from energy-intensive industries that need predictable power costs to remain competitive. It may also discourage projects willing to invest beyond generation into transmission and distribution support. It reinforces a false binary where every privately supplied kilowatt-hour is treated as a loss, instead of asking what system value it brings. That is where the current approach is too narrow.

A Better Model: Co-Investment
South Africa should create a parallel regulatory pathway for strategic co-investment projects. Under such a model, projects that materially improve system resilience would receive more flexible treatment than pure energy arbitrage.

Contributions could include:

• Self-build transmission or distribution infrastructure handed over under agreed terms
• Grid reinforcement at constrained nodes
• Voltage support, frequency response, grid-forming capability and ancillary services
• Embedded generation reducing local network stress
• Local industrial development and job creation
• Long-term offtake structures supporting productive industry

Projects delivering these benefits should not be regulated like passive market participants.

Practice, Not Theory
Mzansi Energy Consortium believes this is practical, not theoretical. Our 12-year PPA with Palabora Mining Company shows how a responsible IPP can strengthen the grid rather than weaken it. Through a grid-forming solution and a self-built 132kV line handed over to Eskom, the project adds clean capacity while supporting voltage and frequency stability in a constrained nodal area. It also delivers local economic participation.

PMC is not simply buying less from Eskom. It is helping stabilise and strengthen the surrounding network. This is the kind of investment that helps Eskom solve problems rather than deepen them. If a private project is willing to strengthen the grid-especially at distribution level-at its own cost, it should not be treated as merely extracting value.

Distributed Challenges Need Distributed Solutions
Much of the concern driving the draft Trading Rules relates to stranded costs and cross-subsidies. But a deeper risk sits in distribution: ageing lines, overloaded feeders and under-maintained municipal networks.

Renewable projects are inherently distributed. When well located, they reduce stress at weak nodes, absorb local load and support areas where the grid is most fragile. Over-restricting them risks removing one of the few scalable tools available to stabilise failing parts of the system.

If Eskom and municipalities cannot fund all upgrades, it is counter-productive to block private projects willing to co-fund improvements where they are most needed.

For MEC and Journey2Green, the goal is not simply to sell kilowatt-hours. It is to design projects that strengthen the grid while delivering long-term cost and security benefits. Our model only works if the system works. The PMC project reflects that philosophy. It shows how investment can align with Eskom’s interests when regulation enables partnership rather than bypass.

Better for Eskom Too
A co-investment framework would not weaken Eskom. Properly designed, it would strengthen its long-term position. It would preserve core revenue while attracting external capital into infrastructure Eskom cannot easily fund. It would reduce pressure on constrained parts of the network, improve reliability for major employers, and shift private-sector activity from adversarial bypass to aligned investment.

Pragmatism Over Ideology
Eskom’s instinct to protect revenue is understandable. NERSA’s mandate to ensure orderly transition is valid. But South Africa cannot regulate from scarcity alone. We need rules that distinguish between speculative bypass and productive partnership.

South Africa does not need private investment that extracts value from the grid. It needs investment that shares risk, builds infrastructure, supports weak nodes and stabilises the system alongside Eskom. The final Trading Rules should therefore include a co-investment track with clear criteria and measurable obligations. South Africa does not need a slower market-it needs a smarter one.