Manie de Waal is the CEO of Energy Partners.
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For decades, energy sat firmly within a company’s operations department. It was a cost to be managed, a utility bill to be paid, and a technical issue for engineers to resolve. Today, that model no longer holds.
South Africa’s energy market is in the midst of structural reform, with market-based energy instruments having introduced a level of complexity that extends well beyond facilities management. Energy decisions now carry balance-sheet implications, audit considerations and regulatory consequences. Yet many corporate governance structures still view energy merely as a cost, assuming a reliable supply from Eskom, rather than recognising it as a strategic opportunity or potential business risk. Companies should move towards considering energy from diverse technologies as a strategic asset, leveraging partnerships to create value.
Energy procurement evolves into capital allocation
The rise of long-term power purchase agreements (PPAs) has fundamentally altered how companies procure electricity. These agreements are sophisticated financial instruments with implications for credit risk, pricing structures, hedging strategies and long-term liabilities. Across the energy landscape, longstanding programmes like the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) have shown how government-enabled private generation, backed by PPAs, adds vital capacity and investment signals into the system.
Boards must now interrogate questions that previously sat outside energy discussions: How are PPA commitments reflected in financial statements? What is the counterparty risk exposure? How do fixed versus indexed pricing structures affect long-term competitiveness?
Similarly, battery storage is no longer merely a resilience measure. Through arbitrage - charging during low-tariff periods and discharging in peak pricing windows – storage systems can materially influence cost structures and cash flow. But these benefits depend on governance oversight, performance monitoring and risk management at a strategic level.
Market liberalisation and wheeling arrangements are rewriting the rules
South Africa’s wholesale electricity market reforms have unlocked new forms of energy trade and access that would have been unthinkable a decade ago. Draft operational rules for the South African Wholesale Electricity Market (SAWEM) are progressing toward implementation, signalling a move away from Eskom’s single-buyer model to a competitive market structure.
This broader reform creates the conditions for more sophisticated wheeling arrangements, where power generated in one location can be consumed by commercial and industrial users elsewhere, and for traders to compete on price and flexibility. In practical terms, wheeling links corporates and suppliers directly, creating opportunities for more efficient energy flows and strategic optimisation.
For boards and audit committees, this increased complexity is a governance challenge. Cost reconciliation across entities becomes intricate when generation, wheeling charges, grid access fees and supply costs intersect. Without robust oversight, discrepancies can emerge between contracted supply, actual consumption and billed charges, generating exposure in financial statements and audit reviews.
Audit and compliance exposure in a rapidly evolving market
As the energy market evolves, so too does compliance risk. PPAs may embed derivative structures. Wheeling agreements require strict adherence to evolving regulatory frameworks. Carbon reporting and energy disclosure requirements continue to tighten. Each of these has implications for audit and governance.
Energy decisions now influence financial disclosures, ESG reporting and long-term capital planning. Without board-level visibility, organisations risk underestimating the exposure created by increasingly complex energy arrangements.
In parallel, national policy reform, including the planned unbundling of Eskom’s transmission assets into an independent state-owned entity, is aimed at attracting private investment and modernising grid infrastructure, which could unlock significant new energy trading and investment opportunities.
The big strategic shift for governance
Many businesses have embraced new energy solutions but retained legacy governance models designed for a single-supplier utility environment. That disconnect is becoming increasingly risky.
Effective governance in today’s energy market requires clear accountability across operations, finance and executive leadership, with structured reporting to boards on energy risk, performance and contractual exposure. It demands data transparency that enables accurate reconciliation and audit readiness. And it calls for deliberate alignment between energy procurement decisions and long-term capital strategy.
Energy is no longer simply about keeping the lights on. It’s about managing financial exposure, protecting margins, safeguarding compliance, delivering on sustainability commitments and positioning the organisation competitively in a market that is structurally transforming.
Manie de Waal, CEO of Energy Partners
*** The views expressed here do not necessarily represent those of Independent Media or IOL.
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