Rédaction Africa Links 24 with Michelle Banda
Published on 2024-04-04 21:32:22
The National Energy Regulator of South Africa (Nersa) has finally approved Eskom’s request to transfer its control over independent power producers (IPPs) to the National Transmission Company of South Africa (NTCSA) four years after the initial unbundling plan was released. This move is a significant step in the unbundling process that aims to divide Eskom into generation, transmission, and distribution entities.
While the NTCSA still needs to fulfill certain conditions to become a separate entity, Nersa has given the green light for the NTCSA to take over Eskom’s role as a buyer of electricity from IPPs starting from April 1. The plan for the NTCSA to purchase power from Eskom’s power stations is currently being finalized and is expected to take at least two months to complete.
According to a joint statement from the Department of Public Enterprises and Eskom, the NTCSA is on track to become a fully owned subsidiary of Eskom Holdings as per the Companies Act. Once all assets, systems, and employees have been transferred to the NTCSA and trading begins, it will operate as a wholly owned Eskom subsidiary.
The unbundling of Eskom marks a milestone in the energy sector, with Nersa emphasizing that responsibilities previously managed by Eskom will now be overseen by the NTCSA. The NTCSA is expected to operate according to the market code, allowing fair access to the grid for all qualified electricity generators. This open access system is seen as an improvement over the existing Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), enabling continuous participation of new entrants in the market.
The establishment of the NTCSA is projected to boost electricity generation capacity, encourage competition, and potentially lead to more affordable electricity prices. It is hoped that this will ultimately eliminate load shedding and improve the overall energy landscape in South Africa.
Despite the positive outlook, there are concerns raised by various stakeholders regarding the unbundling process. Labor unions like Cosatu are apprehensive about the potential impacts on employment, electricity tariffs, ongoing blackouts, and Eskom’s substantial debt. On the other hand, political parties such as the DA and ActionSA see the unbundling as a necessary step towards reducing reliance on Eskom and improving the energy market.
The NTCSA board has been appointed with industry experts and professionals to oversee the operations of the newly formed entity. The board comprises individuals with diverse backgrounds in energy, finance, and governance to ensure effective management and decision-making.
Overall, the approval of Eskom’s unbundling and the transfer of control over IPPs to the NTCSA signal a significant shift in the South African energy landscape. While challenges and criticisms exist, the move is seen as crucial for the future sustainability and competitiveness of the electricity sector in the country.
Read the original article on Daily Maverick
