Business Day

Eskom grid firm is one step closer

• Head of Sasol’s energy business to chair transmissi­on company

- Denene Erasmus Energy Correspond­ent

In another step forward for the separation of Eskom into three stand-alone entities for generation, transmissi­on and distributi­on, the state-owned power utility on Tuesday announced the names of appointees to serve on the board of the recently establishe­d National Transmissi­on Company of SA.

Priscillah Mabelane, executive vice-president for Sasol’s energy business, has been appointed as chair. One of the immediate tasks that the board will face is to help facilitate the appointmen­t of a CEO for the national transmissi­on company.

Once the company has been operationa­lised, the board will have to support the executive in setting up a range of new trading platforms that will allow for the buying and selling of electricit­y among multiple parties.

SA’s electricit­y market, which has long been dominated by Eskom, has already started opening, allowing buyers and sellers to trade via physical bilaterals or wheeling contracts.

However, Eskom has previously pointed out that because these private energy trades are happening without a central market mechanism, the system operator is flying almost blind. Until a transmissi­on system operator is establishe­d, and as the volume of electricit­y trading increases, the national transmissi­on company will fulfil the role of developing such a central market mechanism.

That, in turn, will give Eskom greater visibility of what is happening on the network so that it is able to plan around it.

Other board members include Brian Armstrong, a former Telkom COO, who will serve as the lead independen­t director; Prof Mark Swilling, former chair of the Developmen­t Bank of Southern Africa; and Carmen le Grange, co-director of the Centre for Sustainabi­lity Transition­s at Stellenbos­ch University and a former Denel CFO.

“The [board] appointmen­t takes Eskom a step closer to unlocking the potential that comes with the planned transforma­tion of the electricit­y industry” said Eskom chair Mteto Nyati. “We thank all [those] who raised their hands to guide Eskom into a future where South Africans have a reliable, affordable and environmen­tally friendly supply of power.”

The stand-alone transmissi­on company will play a critical role in allowing for the liberalisa­tion of the electricit­y trading market. It will function as an interim facility, taking on the role of the transmissi­on system operator, which can be establishe­d only after the Electricit­y Regulation Amendment Bill, now making its way through parliament, has been passed.

In this role, the transmissi­on company will begin to facilitate the creation of a transparen­t platform for the competitiv­e trading of electricit­y among multiple buyers and sellers.

It is viewed as a vital move to attract private sector financing to upgrade and expand the transmissi­on network, which will conservati­vely require an investment of about R370bn over the next 10 years.

There has been a delay in passing the Electricit­y Regulation Amendment Bill after parliament’s portfolio committee on mineral resources & energy announced in December that it is planning to repeat public hearings on the bill.

The bill will provide a legal framework for setting up and operationa­lising the company and later the transmissi­on system operator, which will manage the national grid.

In November the World

Bank, one of Eskom’s key creditors, granted its consent for the legal separation of the transmissi­on division from Eskom Holdings to the new National Transmissi­on Company of SA, but consent from some other lenders is still outstandin­g.

Other board members are energy economist Lungile Mashele; former MTN executive Anu Sing; chemical engineer Nkosinathi Solomon; Auke Lont, who has 25 years’ experience in the energy industry; Prof Francis Petersen, the vice-chancellor of the University of the Free State; MBA graduate Sedzani Mudau; Busisiwe Vilakazi, a former senior researcher at the CSIR; and Tryphosa Ramano, who is on the board of Eskom.

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