South Africa’s decoupled transmission company starts trading

The National Transmission Company of South Africa (NTCSA) has officially commenced trading, marking a move in unbundling Eskom’s generation, transmission and distribution divisions, widely considered as key to addressing the country’s power outages and shortages.

The announcement, made by South Africa’s Department of Public Enterprises (DPE) and Eskom SOC Holdings Limited alongside NTCSA, marks the company’s establishment as a separate, distinct and wholly-owned subsidiary of Eskom.

The move is hoped to mark a watershed towards a reformed electricity supply industry, with the country’s energy crisis in recent years having reached worrying levels of power outages due to poor management, corruption and sabotage.

Specifically, the company’s commencement as a distinct entity aims to bring about a competitive electricity market for the country, open up access to the transmission network and enhance efficiency and transparency.

The NTCSA will own and operate the country’s national transmission system, the System Operator, the grid strengthening function, energy market services and the International Trader.

In terms of current South African legislation, NTCSA will play the role of the TSO and buyer but will assume additional roles once the Electricity Regulation Amendment (ERA) Bill is passed into law.

The company will trade with Eskom Generation and Independent Power Producers (IPPs) using the current industry framework. The transition to a competitive electricity market will only commence after the ERA is gazetted and NTCSA will assume the additional role of Market Operator.

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Commenting in a release was Mteto Nyati, Eskom Board chairman: “We are pleased to announce that NTCSA begins trading today and will focus on increasing the capacity of the national transmission grid to allow the connection of much-needed new power generation capacity.

“As a wholly owned subsidiary, it will operate under the direction of an independent board while providing open access to the electricity network, as envisaged during the unbundling process. We look forward to contributing to a more efficient and transparent electricity industry.”

The NTCSA will operate under three licences issued by the National Energy Regulator of South Africa (NERSA):

• The operation of transmission facilities by operating and managing the transmission grid.
• Trading in terms of which it will buy energy from Eskom generators and IPP’s as procured by the Minister of Mineral Resource and Energy.
• Import and export in terms of which it will import and export energy, as well as continue as the trading arm to and from the Southern African Power Pool (SAPP)

Said Priscillah Mabelane, NTCSA board chairperson: “As we embark on this exciting and critical journey, our commitment is to continue focusing on ensuring safe, reliable, and efficient operations while accelerating the development of an interconnected transmission system in line with our mandate.

“We will ensure non-discriminatory access to the transmission network and seek ways to accelerate the rollout of the transmission grid while fostering transparency and efficiency. Together, we look forward to shaping a dynamic electricity market.”