President Cyril Ramaphosa has blamed “external dependencies” for delays in the unbundling of power utility Eskom.
Ramaphosa was responding to a parliamentary question from DA leader John Steenhuisen who had asked about the reasons for the delays after he made a commitment in 2019 to unbundle Eskom.
In his written response, Ramaphosa said Eskom was continuing to work on implementing the legal separation.
“This is a key strategic priority of Eskom’s turnaround plan as envisaged in the Department of Public Enterprises roadmap,” he said.
He said that in line with the roadmap, the corporatisation of the transmission function was completed in December 2021.
“A legally binding merger agreement was entered into between Eskom and its wholly-owned subsidiary, the National Transmission Company South Africa SOC Limited (NTCSA).
“Reasons for the delays in unbundling transmission relate to external dependencies such as obtaining lenders’ consent, acquiring electricity licences and designation of the transmission entity as a buyer.”
Ramaphosa said the next step was to operationalise the NTCSA, which was subject to the satisfaction of certain suspensive conditions.
“These include, but are not limited to, the National Energy Regulator of South Africa (Nersa) granting all applicable licences required for NTCSA to operate the transmission business and Eskom obtaining all applicable creditor consents to the transaction.”
He said future phases of the legal separation would be dependent on legislative changes, including the amendment of the Electricity Regulation Act regarding licensing and the electricity pricing policy of the country’s electricity supply industry.
“The addition of new transmission capacity through expansion of the grid is being accelerated through the implementation of the Transmission Development Plan, supported by the work of the National Energy Crisis Committee,” he said.
Earlier this month, Public Enterprises Minister Pravin Gordhan gave a similar answer when Steenhuisen asked him about the progress made with the unbundling process and reasons for the delays.
Gordhan said the amended Electricity Regulation Act was expected to be in place in 2023.
He said efforts to accelerate the addition of new transmission capacity through expansion of the grid were being addressed through the implementation of the transmission development plan, with the support of the government.
Gordhan said that since the launch of the Department of Mineral Resources and Energy’s Independent Power Producer (IPP) programmes, close to 6.1 GW of new generation capacity has been integrated into the power system.
“There have been IPPs that participated in the private procurement process, who quickly secured grid capacity, mainly in the Western, Eastern and Northern Cape areas”.
“The transmission network capacity in these areas has been taken up, as per grid code requirements, which require Eskom to provide non-discriminatory open access to the grid”.
“This has resulted in network constraints, and this will require substantial augmentations before new generation capacity can be connected to the system.”
Gordhan said the transmission development plan identified the new infrastructure that would be required to implement the IRP 2019 and Eskom’s 2035 corporate strategy.
“However, it takes time to establish new transmission infrastructure (especially the building of long lines and sub-stations) mainly due to servitude acquisitions and constructability challenges.
“Eskom is aware of these challenges and is making every effort to expedite the build programme by engaging key stakeholders in government, as well as the private sector.”
