The South African Government has passed the Electricity Regulations and Amendment (ERA) Bill to enable the transformation of the country’s electricity sector by proposing the end to the monopoly-driven market by allowing competition through key legislative reforms. The bill proposes the establishment of a state-owned Transmission System Operator (TSO) that is legally distinct from Eskom within five years; the expansion and alignment of the powers of the National Energy Regulator of South Africa (NERSA) to regulate the competitive market and the empowerment of NERSA to set and approve tariffs and prices, as well as regulate the participation of independent power producers (IPPs) among other things. The National Transmission Company South Africa (NTCSA, a subsidiary of Eskom Holdings) is proposed to fulfil the functions of the TSO in the meantime.
The bill is expected to ensure electricity sustainability, supply and affordability by driving down the cost of power generation and allowing new investment in the industry to develop new technologies. It also introduces provisions on offences and penalties to address the theft and vandalism of electricity infrastructure.
In 2022, Eskom produced 81% of the electricity consumed in South Africa. In 2019, the country unveiled plans to split Eskom into three separate companies dedicated to power generation, transmission, and distribution, followed by the creation of the NTCSA in 2021 to administer the transmission activities and it is expected to be operational in mid-2024.
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