The strategic significance of the reference to energy reform in South African President Cyril Ramaphosa’s State of the Nation Address cannot be overstated.
Many media reports carried a sense of elation about how this clears the way for resolving the country’s long-term energy crisis. This sentiment is premature: there are many devils in the details that need to be attended to before the country can celebrate.
Ramaphosa announced that the soon-to-be established Transmission System Operator will own South Africa’s transmission assets. This would include all main powerlines and sub-stations.
This was contrary to what had been expected, particularly by South Africa’s state-owned power utility Eskom. Its assumption was that it would retain ownership of the transmission assets via its subsidiary, the National Transmission Company of South Africa, which was established in 2024.
Ramaphosa disagreed.
“We are restructuring Eskom and establishing a fully independent state-owned transmission entity. This entity will have ownership and control of transmission assets and be responsible for operating the electricity market.”
He went on to say: “Given the importance of this restructuring for the broader reform of the electricity sector, I have established a dedicated task team under the National Energy Crisis Committee to address various issues relating to the restructuring process, including clear timeframes for its phased implementation. It will report to me within three months.”
The implications of this statement are far-reaching.
Surprise move
The National Transmission Company of South Africa, established in July 2024, is the current owner and operator of the national grid transmission system. It is entirely owned by Eskom Holdings. – moneyweb
