Ramokgopa approves Eskom’s unbundling strategy
Electricity Minister Kgosientsho Ramokgopa has approved Eskom’s revised unbundling strategy, paving the way for the next phase in Eskom’s separation.
President Cyril Ramaphosa announced the overhaul in the country's electricity sector during his 2019 State of the Nation Address.
He said that Eskom would be split into three entities: generation, transmission, and distribution.
The policy change aims to enhance service delivery, promote competition, and ensure clarity for investors and policymakers.
Eskom stated that the plan aligns with the Electricity Regulation Amendment Act and advances the separation of the utility to enhance service delivery, promote competition, and provide clarity for investors.
Under the updated model, the National Transmission Company of South Africa will retain ownership of transmission assets as a subsidiary of Eskom. At the same time, the government will initiate a legal process to establish an independent Transmission System Operator separate from Eskom.
The TSO will oversee system and market operations, ensuring fair grid access to support a competitive wholesale market.
Ramokgopa said the decision strengthens public oversight, promotes affordability and efficiency, and protects Eskom’s financial stability during the transition.
“This supports strong public oversight and the rule of law while enabling affordable, competitive pricing, increased efficiency, and a diverse supply," he said on Tuesday.
"The proposed approach aims to preserve the financial stability of the Eskom Group by minimising disruptions to its highly leveraged balance sheet, thereby mitigating risks to both Eskom and national energy security.”
He said the unbundling strategy is designed to address reform in the electricity sector, facilitating independent and equitable access for all market participants.
“In line with the approved framework, we are set to ensure a level playing field for market participation and instil greater certainty for investors looking to bring essential capacity into the system,” the Minister added.
Ramokgopa stated that generation capacity is expected to increase from 66 GW in 2024 to 107 GW by 2034.
Eskom will roll out the strategy in phases, working with the government, regulators, labour, and municipalities to manage risks and support a stable transition to a competitive energy system.
