New electricity laws incoming – giving more power to Mantashe and Nersa, and opening up the market
The Department of Mineral Resources and Energy says it will soon introduce the Electricity Regulation Amendment Bill 2022 in the National Assembly.
In a government gazette from 19 April 2023, the department noted that the new bill would seek to strengthen the role of the National Energy Regulator of South Africa (Nersa), give more powers to the minister of electricity, and open up the country’s electricity market but making room for independent transmission companies.
Regarding Nersa, the bill makes specific provisions relating to licensable and exempted activities in the energy sector.
Furthermore, the amendment bill will seek to amend section 34 of the Electricity Regulation Act to provide more clarity in circumstances under which the minister of energy must make ministerial determinations.
Under section 34 of the new bill, when it comes into law, the minister of energy may, in a notice in the Gazette, after consultation with Nersa and the minister of finance, make a determination that additional electricity or new generation capacity is needed to ensure the optimal supply of electricity.
The bill will also empower the minister to determine the types of energy sources or technologies from which the electricity may be generated.
Other amendments relate specifically to the transmission system operator, including: defining its functions and powers by establishing a multi-market electricity trading platform and; facilitating ‘access to the transmission network on a non-discriminatory basis.’
The transmission system operator in South Africa’s electricity context manages and operates the high-voltage transmission network, ensuring a reliable and secure electricity supply.
Through the new bill, an entity will be established to buy power – increasing competition in the electricity market.
When speaking on the bill, President Cyril Ramaphosa said that the varied proposals under the amendment bill form part of several steps the country is taking to reform the electricity sector towards achieving a stable and secure supply of energy.
“They will also strengthen the performance of the electricity industry and ultimately create a conducive environment towards growing the economy,” said Ramaphosa.
The bill’s preamble notes that it already empowers Nersa to provide for licences and registration as the manner in which generation, transmission, distribution, system operation, reticulation, trading and the import and export of electricity are regulated.
Opening up the electricity market by expanding the transmission sector is a significant step in the government’s plans to split the embattled power utility Eskom into three separate entities.
This measure will go a long way to breaking Eskom’s monopoly in the market and will assist private companies in becoming bigger roleplayers in resolving the energy crisis.
The unbundling of Eskom will allow the generation sector – Eskom’s worst-performing unit and the cause of load shedding – to become more competitive and welcoming to private players, while the transmission and distribution companies can continue expanding on their operations.
The unbundling process has been ongoing for several years, and has caught a second wind due to the government’s push to resolve the crisis via the Energy Action Plan – in which, setting up a transmission company is one of the goals.
The notice of publication is shown below:
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