Mineral Resources and Energy Minister Gwede Mantashe says the Electricity Regulation Amendment Bill will open competition in the market.
He said the bill will allow anyone who can generate electricity to do so.
Mantashe said this should not be limited to the private sector, but cities and towns must also generate their own electricity.
This reform was brought by government to deal with load shedding.
Eskom has over the last two years been implementing regular power cuts and this has affected households, businesses, schools, hospitals and other sectors.
Mantashe said the adoption of the bill will now allow for competition in the electricity.
The National Assembly on Thursday passed the Electricity Regulation Amendment Bill after it was finalised by the portfolio committee on mineral resources and energy and tabled in the House for adoption.
“Cities have a right to generate own electricity now. We have effected that reform ourselves. Any city, town can generate their own electricity.
“It’s not just opening private sector. It is opening competition in the electricity market. That’s all that is in this bill. Don’t limit it to the private sector, allow that cities and towns and everybody. The deregulation of embedded generation opens up opportunities for anybody to generate electricity,” said Mantashe.
But the Economic Freedom Fighters (EFF) said the bill was an attempt to privatise Eskom.
EFF MP Omphile Maotwe said the government has been trying to privatise Eskom for years and they were now using the bill to do it.
She said electricity generation collapsed at Eskom and the power utility failed to maintain power stations.
“The persistent electricity blackouts were allowed to happen to pave the way for the so-called need to open the market that allows competitive electricity trading. The competitive electricity trading is nothing but privatisation of electricity generation,” said Maotwe..
The African Christian Democratic Party (ACDP) said the bill will be a game-changer in electricity generation in the country.
ACDP MP Steve Swart said Eskom’s failure to supply power in the country resulted in loadshedding and has had devastating impact on the economy.
South Africa needed to find other ways to address the crisis in the generation of electricity. .
The bill was a step in the right direction, said Swart.
“This bill is intended to make it easier to produce and sell electricity in the country. If properly implemented it could be a game-changer, a positive step towards a more reliable, affordable and sustainable electricity system by enabling multiple electricity producers to compete on a national playing field,” said Swart.
The Inkatha Freedom Party (IFP) said it supported the bill as it will ensure there were other players in the market to generate electricity.
Zandile Majozi of the IFP said South Africa has reached this point because Eskom was allowed to do what it wanted.