Ramaphosa signs bill aimed at unbundling Eskom
President Cyril Ramaphosa signed the Electricity Regulation Amendment Act into law on Friday.
The signing marked a significant step towards the unbundling of Eskom and the transformation of South Africa’s electricity sector.
The newly enacted law provides for the creation of a Transmission System Operator, and an open market platform, enabling what the government hopes to be competitive electricity trading.
The plan was first mooted in Ramaphosa’s 2019 State of the Nation Address.
Presidency spokesperson Vincent Magwenya believes the act introduces far-reaching reforms aimed at establishing a competitive electricity market.
"The bill, signed by the president, amends the Electricity Regulation Act of 2006 to address current challenges in the electricity sector.
It opens pathways to greater competition and reduced energy costs, increases investment in new generation capacity to achieve energy security, and establishes an independent transmission company to oversee the national grid.
The act also imposes severe penalties for damage to and sabotage of infrastructure," Magwenya explained.
"The Electricity Regulation Amendment Act mandates the establishment of the Transmission System Operator SOC Ltd as an independent entity within five years.
In the interim, the National Transmission Company of South Africa will function as the TSO.
The act also facilitates the creation of an open market platform for competitive wholesale and retail electricity trading," he added.
Magwenya said the act also clarifies principles for setting or approving prices, charges, and tariffs.
“It stipulates that Nersa must enable licensees to recover the full cost of their activities, allow for a reasonable return proportionate to the associated risks, and may provide incentives for continued improvement in technical and economic efficiency.”
"To ensure fair competition among multiple electricity generators, the act requires that the system operator must not discriminate between different generators or customers in system dispatching or balancing, except for objectively justifiable reasons approved by the regulator.
Access to the transmission and distribution power system must be objective, transparent, and non-discriminatory," added Magwenya.
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