Public enterprises minister Pravin Gordhan said his department would try to expedite the process of establishing a national transmission company as the restructuring of Eskom continues.
“This process is complicated as it involves getting consent from the National Energy Regulator of South Africa for a transmission licence. One of the licences has been issued and two others are being awaited. Hopefully, in the coming weeks there will be answers on the other two licences,” Gordhan told Business Times.
Gordhan’s remarks came as load-shedding continues to wreak havoc on the economy and amid concerns that the tabling of the Electricity Regulation Amendment Bill (ERAB), a critical piece of draft legislation for transforming Eskom, is being delayed by the department of mineral resources & energy. The bill is crucial in enabling private sector participation in the energy sector.
Gordhan said an operating licence had been secured for the transmission company, but his department was waiting for a trading licence and an import/export licence.
Once it is up and running the transmission company must publish an annual development plan with public disclosure on how the grid will be expanded and funded, as well as how systems will be updated, he said.
“We have been interacting with Nersa about the urgency of this matter and we hope that they will be responsive to us in the near future. The new [transmission company] will have a set of directors and we will make some announcements on that in a short while as well.”
The transmission company is one of three divisions into which Eskom is being split — the others are generation and distribution.
Asked about a time frame for the transmission entity, Gordhan said: “Our focus is on urgency so the next few months will be spent instilling a new sense of urgency on this matter, and I would like to leave it at that.”
Asked about reported delays in the tabling of the ERAB, Gordhan said: “I have to take it from what was said by the minister of minerals & energy [Gwede Mantashe] that they have got the bill in hand.”
As it prepares for the establishment of a separate transmission company, Eskom told Business Times it has an established framework and policy dealing with electricity wheeling and has discussed it with all stakeholders.
Wheeling is the delivery of energy from a generator to an end-user in another area through the use of an existing distribution or transmission network.
Municipalities, which will play a crucial role in distribution in the reformed electricity market, said their interactions with independent power producers are gathering pace.
Isaac Mangena, spokesperson of Johannesburg’s power utility City Power, said the IPP programme was awaiting mayoral and council approval, before submission to the National Treasury, Nersa and the DMRE.
The objective is to test our wheeling agreements, billing system, wheeling rules, and various wheeling scenarios. Once these objectives have been met, the city will open wheeling to the rest of the city market
— Cape Town MMC Beverley van Reenen
“As a stopgap measure, City Power embarked on procurement of short-term PPA [power purchasing agreements] which is currently under evaluation as per supply chain management processes,” he said.
The City of Cape Town mayoral committee member for energy Beverley van Reenen said the metro was testing its wheeling framework in a pilot with 15 participants.
“This represents 25 generators, 40 off-takers or customers, and approximately 355MW of energy to be wheeled. The objective is to test our wheeling agreements, billing system, wheeling rules, and various wheeling scenarios. Once these objectives have been met, the city will open wheeling to the rest of the city market,” said Van Reenan.
EThekwini municipality spokesperson Gugu Sisilana said a wheeling regime was in the works and procuring new generation capacity from IPPs was at an advanced stage following the section 34 ministerial determination and the transfer of powers to electricity minister Kgosientsho Ramokgopa.
“We remain hopeful that the request for a proposal for the development of 100MW solar power and 300MW gas-to-power from IPPs will be released to the market before the end of this calendar year. The city has also concluded its generation connection capacity assessment,” she said.
Sisilana said the city’s electrical infrastructure could cope with new generation capacity of 400MW without major modification. Requests for information were expected to be released towards the end of the month for hydrogen supply chain infrastructure projects and energy efficiency.
Nelson Mandela Bay municipality spokesperson Sithembiso Soyayya said the city has been on a virtual wheeling platform since 2013 through a licensed electricity trader and has a 2030 energy plan to decarbonise and diversify its energy mix in a sustainable manner.
“The key challenge was the complex supply chain process for procurement of more than three years; the municipality had to solicit legal advice. Another challenge was to get a cost-reflective tariff that will promote energy transition in a sustainable manner for municipalities,” said Soyaya.
The department of co-operative governance & traditional affairs said its municipal infrastructure support agent was providing engineering support for councils.
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