Eskom’s new transmission company coming – 23 years later

Legislation is before Parliament that would enable the creation of a new company to manage the country’s transmission network 23 years after the process began. 

The Electricity Regulation Act was tabled in Parliament this week, aiming to facilitate the unbundling of Eskom and increase the role of the National Energy Regulator of South Africa (Nersa) in the electricity sector. 

Energy expert Hilton Trollip told the SABC that this legislation would have no impact on the supply of electricity in South Africa in the short term. 

“Creating a separate company to manage Eskom’s grid is a very good idea. It is crucial, but it will only really impact the country’s long-term energy security,” Trollip said. 

Eskom currently controls all facets of the electricity supply in South Africa, from the generation of electricity to the transmission and distribution. 

The Act restructures the electricity industry in South Africa by enabling the government to create a new company to manage Eskom’s transmission grid. 

In effect, the transmission grid will be removed from Eskom, Trollip said. 

The process of creating a separate transmission company began in 2000, with a Bill outlining the creation of such a company being tabled in Parliament in 2014. 

President Cyril Ramaphosa announced the unbundling of Eskom into three separate entities during his State of the Nation Address in 2019. However, the creation of a separate transmission company has been hit by numerous delays. 

Eskom chairman Mpho Makwana said the utility expects the transmission company to be operational by the third quarter of 2023. 

Makwana said creating a separate transmission company would bring new players into the energy market and result in new generation capacity coming online. 

Trollip dismissed this, saying the legislation creating a new transmission company would not impact electricity generation for at least the next two to three years. 

Existing legislation already allows for additional generation to be added to the grid. “What we need is the Energy Minister to actually implement the existing policy,” Trollip said. 

The current Energy Action Plan (EAP) does not require any new laws to implement. It just needs a capable and efficient government.

To solve South Africa’s existing electricity shortfall, new capacity needs to be added to the grid urgently, not only in a few years’ time when a new transmission company is up and running. 

The government’s stated policy is for this new capacity to come from the private sector, as Eskom’s debt relief plan from the National Treasury does not allow it to invest in new generation capacity. 

New electricity generation will have to be procured through the government’s Independent Power Producer (IPP) office.