Nod for unbundled power lines firm

Nod for unbundled power lines firm

Cabinet wants parliament to fast-track adoption of amendment bill Cabinet adopts draft Electricity Amendment Bill that will pave the way for the purchase and transmission of power from Eskom and private producers

Parliamentary CorrespondentThe process of establishing an independent transmission system operator has taken a significant step forward with the cabinet’s adoption of the draft electricity amendment bill, which it wants parliament to deal with as a priority.

An independent transmission system operator is crucial for the purchase and transmission of electricity from Eskom and private energy producers on an impartial basis.

In a media statement delivered after a weekly cabinet meeting on Thursday, minister in the presidency Khumbudzo Ntshavheni said the aim of the bill is to make provision for transitional measures for the creation of the transmission system operator.

The bill will define the functions of the transmission system operator, which includes the provision of an electricity trading platform on a multimarket basis, and access to the transmission network on a nondiscriminatory basis.

The bill also aims to strengthen the role of the National Energy Regulator of SA (Nersa) and to the provisions related to licensable and unlicensable (exempted) activities.

"The leader of government business, the deputy president [Paul Mashatile], is engaging with parliament not only on the expediting of the Electricity Amendment Bill but a number of bills that are a priority for the country, and we are estimating that those bills should be prioritised and finalised by parliament by the end of term of the new year that is starting from the first of April," Ntshavheni said.

In a written reply on Thursday to a question by DA leader John Steenhuisen on the progress with unbundling Eskom into three independent entities and the urgent need to deal with the country’s inadequate transmission capacity, public enterprises minister Pravin Gordhan said Eskom was continuing with work to implement the legal separation of the transmission entity.

The corporatisation of the transmission company was completed in December 2021. A legally binding merger agreement has been entered into between Eskom and its wholly -owned subsidiary, the National Transmission Company SA.

"The reasons for the delays in unbundling transmission substantively relate to external dependencies such as obtaining lenders’ consent, acquiring electricity licences, and designation of the transmission entity as a buyer," Gordhan said.

"The next step is to operationalise the National Transmission Company SA, and this is subject to the satisfaction of certain suspensive conditions, which include, but are not limited to Nersa granting all applicable licences required for the National Transmission Company SA to operate the transmission business; and Eskom obtaining all applicable creditor consents to the transaction."

Gordhan said future phases of the legal separation will depend on legislative changes, which are being driven by the department of mineral resources & energy and the department of public enterprises. The changes include the amendment of the Electricity Regulation Act regarding licensing and the electricity pricing policy of the electricity supply industry. The amended Electricity Regulation Act is expected to be in place during the course of the year.

Efforts are being made to accelerate the addition of new transmission capacity, Gordhan said. Since the launch of the independent power producer (IPP) programme, almost 6.1GW of new generation capacity have been added to the national power system.

"Following the announcement of the preferred bidders for bid window 5 and 6, 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," Gordhan said.

"The transmission network capacity in these areas has been taken up, as per grid code requirements, which require Eskom to provide nondiscriminatory 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 added.

The minister said it takes time to establish new transmission infrastructure, especially the building of transmission lines and substations, mainly due to servitude acquisitions and construction 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," Gordhan said.

ensorl@businesslive.co.za

Transmission mission: Minister in the presidency Khumbudzo Ntshavheni briefs the media on the outcomes of the postcabinet meeting at the Ronnie Mamoepa press room in Pretoria on Thursday. She said the aim of the electricity amendment bill is to make provision for transitional measures for the creation of the transmission system operator. Freddy Mavunda