Unbundling Eskom is still a top priority, says Electricity minister

JOHANNESBURG - Minister of Electricity Kgosientsho Ramokgopa says the unbundling of Eskom and the establishment of an independent national transmission company remain top priorities for the government.

Ramokgopa was visiting Ankerlig and Koeberg power stations in the Western Cape as part of his national tour of Eskom’s plants. He was quoted earlier saying that unbundling Eskom was not a priority.

The roadmap for Eskom published by Minister of Public Enterprises Pravin Gordhan in 2019 proposes the splitting up of Eskom into three units: generation, transmission and distribution.

The restructuring is an essential part of creating a competitive electricity market in SA, where multiple producers sell power to a single stateowned grid company.

However, Gordhan has taken inordinately long to establish the board of the transmission company, which is one of the necessary next steps to moving on.

Said Ramokgopa: “I never said unbundling was not a priority. If you look at the energy action plan, it has five pillars and the last one deals with the reforms that are necessary.

All I am saying is that it does not make a difference whether Eskom is unbundled or not when it comes to load shedding. It doesn’t resolve the generation problem. I’m placing additional attention on resolving the generation side and the rest of the issues, they are long-range reforms that are necessary to address energy security. They are very important.” Professor Anton Eberhard, director of UCT’s power futures lab, said he understood that Eskom’s generation was Ramokgopa’s immediate priority. Market reform had to happen in parallel with efforts to fix Eskom. In particular, the transmission company must be established. “Transmission access is now the biggest constraint for new generation. An independent transmission system operator ( TSO) will be insulated from Eskom’s financial woes and could migrate to improved credit ratings and access competitively priced capital markets to fund transmission investments. This is critical. All this takes time. We need to start now,” he said.

Gordhan is developing a public-private partnership model to mobilise resources for investment in the grid. The details are still to be announced.

Eberhard said that raising private finance for investment in transmission was essential as Eskom could not finance this sufficiently.

He also strongly advocates unbundling as essential to establishing a competitive power market, which he says is only possible if the transmission and market operator are unbundled from Eskom.