THE Minister of Electricity and Energy, Dr Kgosientsho Ramokgopa, has approved the establishment of a new and independent Transmission System Operator (TSO), which will be a state-owned company outside of Eskom Holdings. Once operational, the TSO will be a fully separate entity, reporting under the regulatory framework of the National Energy Regulator of South Africa (Nersa).
Welcoming the approval, the National Transmission Company South Africa (NTCSA) said the Minister granted the approval as part of his approval of Eskom Holdings’ revised unbundling strategy to meet the requirements of the Electricity Regulation Amendment Act (ERAA). This is an important milestone in the country’s energy reform agenda and in building a power system that is more secure, better run and open to wider participation, according to the NTCSA.
“This is a further welcome development in advancing policy to deliver the future structure of the electricity supply industry and address affordability through establishing a fair, competitive market for electricity in South Africa. The TSO will be fully independent of the NTCSA and Eskom Holdings to provide transparent and unbiased access to the transmission network, under strong regulatory oversight from Neersa, and now the hard work continues to ensure a robust solution is delivered on time,” said Monde Bala, chief executive officer, NTCSA.
“This is the best solution to provide confidence and trust to attract other players to invest in transmission infrastructure, by enabling fair access to the grid. This will enable energy security and removes Eskom from the potential conflict of interest that may exist in relation to its dual role of being a generator and owner-operator of the transmission grid. Granting Independent Power Producers (IPPs) non-discriminatory access to the transmission grid is expected to boost investor confidence and attract greater investment towards the development of low carbon and renewable energy generation projects,” continued Bala.
According to the NTCSA, the ERAA anticipates the establishment of the independent TSO within the next five years, while Eskom has been working to implement the building blocks to ensure this is achieved within the anticipated timelines.
New and independent TSO
A new and independent TSO will be established outside the Eskom group to carry out the following functions of the TSO as set out in the ERAA:
- Transmitter: Develop and execute the Transmission Development Plan, maintain and operate the transmission grid, and provide non-discriminatory access to that grid to all market participants.
- System operator: Operate the integrated power system and balance supply and demand in real time.
- Market operator: Establish and manage a transparent, non-discriminatory electricity trading platform in compliance with market codes and rules issued by Nersa, to ensure competitive trading between generators, traders and customers.
- Central purchasing agency: Act as buyer of electricity from generators, including Eskom (through GenerationCo and Eskom Green) and IPPs, and facilitate power purchase agreements.
- Other duties: Support ancillary services such as frequency control and voltage regulation to maintain system reliability.
