Energy

End of an ERA – Eskom’s monopoly drawing to a close

The National Assembly recently passed a Bill that could see the end of Eskom’s monopoly over power generation and transmission as the industry is opened up to private competitors.

On Thursday, the National Assembly passed the Electricity Regulation Amendment (ERA) Bill, which makes provision for a state-owned Transmission System Operator (TSO) to be established.

Energy expert Chris Yelland said this is “an extremely important step on the way to a restructured electricity supply industry”.

“This really sets the framework for separating the transmission business of Eskom out of the rest of Eskom, creating a separate and nominally independent company which is a subsidiary of Eskom Holdings,” he said.

The state-owned TSO established under the Bill will –

  • Operate the national transmission grid
  • Manage supply and demand
  • Create an open-market platform that will allow for the competitive trading of electricity

Yelland explained that the importance of this Bill lies in the fact that – once signed into law – it will create a level playing field.

This will result in all generators – not only Eskom – having equal access to the grid. 

This includes independent power producers, municipal electricity generators, and “prosumers” – customers of electricity who also generate electricity.

He said this removes some of the stumbling blocks to investment in South Africa’s energy sector because, in the past, preference has been given to Eskom generation. 

“The ERA Bill really lays the framework necessary to establish a diversified and competitive generation sector,” he said.

“And it’s important that the transmission sector should be independent of the generator that exists – Eskom – if you want to encourage new entrance into this sector.”

However, Yelland warned that there is a way to go still for the Bill to achieve its aims. 

First and foremost, the Bill has not yet been signed into law by the President or been approved by the National Council of Provinces.

In addition, the national election later this year could usher in a new administration, which brings about the possibility of further changes to the Bill.

However, Yelland said he is heartened that the Bill has achieved fairly broad multi-party support, making it more likely that the Bill will ultimately be signed into law a few months after the general election.

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