South Africa’s ongoing electricity supply challenges could ease slightly as the government’s proposed amendments to the energy policy strip Eskom of its dominant position in the market.
SOUTH Africa’s ongoing electricity supply challenges could ease slightly as the government’s proposed amendments to the energy policy strip Eskom of its dominant position in the market.
The Cabinet on Friday approved the publication of the Electricity Regulation Amendment Bill aimed to broaden the national regulatory framework for the electricity supply industry.
The bill is envisaged to align the country with the international best practice in energy by enabling the trading and reselling of electricity among private players.
This will relieve Eskom of the burden of being the only electricity supplier and take away its monopoly in this crucial industry to economic growth.
The regulations also make provisions for the functions of a transmission system operator, and for a licensing framework for power generation, transmission, distribution and trading.
The proposed regulations are open for 30 days of public comment.
On Thursday, President Cyril Ramaphosa said these amendments would enable a competitive market for electricity generation and the establishment of an independent state-owned transmission company.
Eskom has established a separate transmission subsidiary, and is on track to complete its unbundling by December 2022.
Ramaphosa said economic growth had been held back by an unreliable electricity supply, inefficient network industries and the high cost of doing business.
“The electricity crisis is one of the greatest threats to economic and social progress,” Ramaphosa said.
“Load shedding continues to have a huge impact on the lives of all South Africans, disrupting business activities, and placing additional strains on families and communities.”
Eskom implemented this year’s first stage 2 load shedding earlier this month owing to several breakdowns at its ageing coal-fired power plants.
The proposed amendments form part of several steps the country is taking to reform the electricity sector towards achieving a stable and secure supply of energy.
They will also strengthen the performance of the electricity industry and ultimately create a conducive environment towards growing the economy.
Even though big business welcomed these amendments, it said it was hoping for another “big bang” announcement such as when the cap for energy self-generation without a licence was raised to 100MW, not the 10MW limit.
Business Leadership SA chief executive Busi Mavuso said that breakthrough moment in liberalising the sector had generated much optimism that the government was serious about getting the economy on a strong growth path.
“Unfortunately, much of the momentum and goodwill generated by that move has dissipated as other areas of the energy reform process are being held up for no specific reason.
“There is so much at stake, with each bout of load shedding stripping the economy of billions of rand, and this will keep happening until supply meets demand.”
Eskom has an energy supply gap of between 4,000MW and 6,000MW.
Business is eager to see renewable energy projects and increased electricity generation by private stakeholders bear fruit and add much-needed power to the grid.
Intellidex’s head of capital markets, Peter Attard Montalto, said the gazetting of a new bill made important clarifications on the role of the transmission system operator.
“The overall tone was ’everything is going on – hang in there’ more than ’look at all the new things we are doing’,” he said.
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