The national energy regulator Nersa has granted the new Eskom transmission company two important licences vital to its operations – clearing the way for the complete overhaul of Eskom.<\/p>\n\n\n\n
Nersa granted the transmission company – the National Transmission Company of South Africa (NTCSA) – a trading licence<\/strong> and an import\/export licence<\/strong>.<\/p>\n\n\n\n The trading licence application was made in terms of section 7(1)(c) of the Electricity Regulation Act, 2006 (Act No. 4 of 2006) (\u2018the ERA\u2019), which provides that No person may, without a licence issued by the Regulator in accordance with this Act\u2026 be involved in trading. <\/p>\n\n\n\n The application was also lodged in compliance with section 10 of the ERA.<\/p>\n\n\n\n The service that will be rendered under the trading licence is the buying and selling of electricity as a commercial activity<\/strong> only. <\/p>\n\n\n\n The NTCSA applied for a trading licence to buy and sell electricity from Eskom power stations, independent power producers (IPPs) under section 34 determinations, including cross-border electricity imports and IPP generators under the Eskom Holdings programmes, such as short-term power purchases only to Eskom Distribution exclusively.<\/p>\n\n\n\n The term of the NTCSA\u2019s trading licence will be five years as a transitional arrangement to allow for transition from the exclusive trading arrangement and incorporation of changes that may emanate from the ERA amendment and price review processes. This will enable the Energy Regulator to review the licence conditions after five years.<\/p>\n\n\n\n The import\/export licence followed a similar application process.<\/p>\n\n\n\n The NTCSA intends to conduct import and export of electricity activities in terms of its import\/export licence throughout the Southern African Development Community (SADC) using the NTCSA\u2019s transmission network and the transmission systems of other SADC member countries.<\/p>\n\n\n\n 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<\/strong>. <\/p>\n\n\n\n NTCSA will also facilitate wheeling on behalf of cross-border utilities and receiving a wheeling service from the cross-border utilities, Nersa said.<\/p>\n\n\n\n The approval will enable the continuation of import and export activities presently fulfilled by Eskom Holdings SOC Ltd. Imports and exports are transacted based on power purchase agreements and power sales agreements entered into with cross-border utilities, cross-border generators, as well as via the SAPP competitive markets. The transmission network operated by the NTCSA will be used for import and export activities.<\/p>\n\n\n\n New Eskom<\/strong><\/p>\n\n\n\n The licence approvals light the path for the NTCSA to start trading in November, as per the overall master plan for the unbundling of Eskom.<\/p>\n\n\n\n Eskom is currently in the process of being split into three companies that cover its main operations: Transmission, Distribution and Generation.<\/p>\n\n\n\n Under the proposed structure of the \u2018new\u2019 Eskom, a new holding company (dubbed NewCo) will operate with three subsidiaries that function independently.<\/p>\n\n\n\n The NTCSA was incorporated in 2021, and while Nersa approved the licence to operate the transmission system within the boundaries of South Africa, this excluded the trading and import\/export applications.<\/p>\n\n\n\n Eskom\u2019s plan is to commence the trading of the transmission company by November 2023<\/strong>,contingent on these licence approvals, which have now come through.<\/p>\n\n\n\n Progress on the distribution company has been slower, but even this is expected to up and running in 2024.<\/p>\n\n\n\n\n
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