In a move aimed at opening up the electricity space, electricity minister Kgosientsho Ramokgopa unveiled a framework that would allow energy users to choose their power sources and not be held “captive” by Eskom.
Briefing the media in Pretoria on Tuesday on the updated regulatory rules on network charges for third-party transportation of energy, Ramokgopa said the framework would also facilitate “greater investments” in the country and improve network reliability, among others.
He said the framework supported open access to the electricity network. “This will allow end users to choose power sources [so that they] are not [held] captive to what Eskom has to offer. The impact is that we are going to make it possible for people to choose. But at first it’s going to be utility scale users,” the minister said.
This comes as state-owned power utility Eskom has been praised for eliminating load-shedding in recent months. It also comes after Eskom implemented a 12.74% tariff increase on its direct customers effective April 1. Tariffs for municipal bulk purchases will increase by 11.32% effective July 1.
The state-owned power utility, which is owed about about R100bn by municipalities, is seeking to generate total revenue of R446bn for 2026, R495bn for 2027 and R537bn for 2028.
Ramokgopa said the framework would allow for more investments in the country. “We are resolving an economic problem using energy and electricity as a lever.” This would also lead to the growth of independent power producers as “they don’t have to wait for bid windows”. Participants, however, need to be registered with the National Energy Regulator of SA (Nersa).
He described the framework as “the most consequential intervention we are making in the electricity sector. It’s going to bring into life what was envisaged in the energy action plan the president enacted in July 2023”.
“It’s going to achieve energy security in the country, diversify generation sources so we don’t only rely on Eskom for electricity generation in the country. It’s also significant because it’s going to allow private sector players to be able to contribute to the reduction in the greenhouse emissions and help secure existing markets,” the minister said.
“From a regulatory point of view, we need to update the regulatory framework to keep pace with the evolving energy sector and be ahead of the evolution of this sector.
“What we are unveiling to the country …... is that we are making it possible for someone to generate energy and electricity in one part of the country and supply to an off-taker in another part of the country.
“We are defining the rules in how those electrons are going to move from the source of generation going through the transmission, in some instances the big transmission lines of Eskom, and getting down into some municipal space.”
Ramokgopa stressed it was the government’s intention to have multiple players in the generation side of electricity and the framework would allow for “flexibility in energy distribution”.
The framework enables electricity transportation across licensed networks, “enhancing energy security”. It also promotes competition and private sector participation, “resulting in lower electricity prices”.
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