Eskom has projected that its unbundled, wholly-owned transmission subsidiary will commence operations at the beginning of the new financial year, beginning 1 April 2024, after satisfying all suspensive conditions.
This comes after the Energy Regulator of SA (Nersa) yesterday approved that the National Transmission Company of South Africa (NTCSA) be issued with two outstanding licences.
Nersa approved the NTCSA be issued with a 5-year trading licence following an application lodged in compliance with section 10 of the Electricity Regulation Act (ERA).
The energy regulator also approved that the NTCSA be issued with an import and export licence, subject to licence conditions imposed.
The approval of the transmission licence was the first of three steps that were required to get the NTCSA off the ground, culminating in the transmission company acting as a system operator of the national grid.
In July, Nersa approved that the NTCSA be issued with a licence to operate a transmission system within the national boundaries.
In response to questions from BR, Eskom today welcomed the decision by Nersa for the approval of the trading and import/export licences, saying it marked a significant milestone in the legal separation process of the Transmission Division.
Eskom acting spokesperson Daphne Mokwena said the operationalisation of the NTCSA was subject to the satisfaction of suspensive conditions, which include, but are not limited to, Eskom obtaining all applicable lenders consent.
Mokwena also said suspensive conditions also included the appointment of the NTCSA board, Nersa’s concurrence on the DMRE buyer assignment of NTCSA, and related activities to be concluded by government, and the fulfilment of outstanding legal requirements.
“The above will enable various preparatory activities that need to be concluded before trading can commence,” Mokwena said.
“Eskom is projected to finalise all activities by the end of the fourth quarter of the current financial year and commence trading in the new financial year.”
The NTCSA is envisioned to be an independent transmission system operator incorporating, inter alia, the currently non-licensable but integrated functions of network provision, system operation and system planning.
The trading licence will allow NTCSA to buy and sell electricity from Eskom power stations and independent power producers (IPPs) under Section 34 determinations.
This will include cross-border electricity imports and IPP generators under the Eskom Holdings programmes, such as short-term power purchases, only to Eskom Distribution exclusively.
The NTCSA also intends to conduct import and export of electricity activities in terms of its import/export licence throughout the Southern African Development Community (SADC) using its transmission network and the transmission systems of other SADC member countries.
The service that will be rendered under the licence is importing and exporting power in terms of power supply agreements, power purchase agreements and Southern African Power Pool (SAPP) competitive markets.
NTCSA will also facilitate wheeling on behalf of cross-border utilities and receiving a wheeling service from the cross-border utilities.
Independent energy expert Lungile Mashele said these regulatory changes placed power to procure directly in the realm of the system operator, which is pivotal for adequate system functioning.
“More importantly, the regulator has found that the short, medium and long term power purchase programmes are prudent and that there is a fair risk allocation between the parties,” Mashele said.
“This will ensure that some of these contracts are concluded quickly, thus ensuring more capacity is made available to NTCSA quickly.”