The Start of Eskom’s Unbundling?

The Energy Regulator has approved that the National Transmission Company of South Africa (SOC) Limited (‘NTC’) be issued with a licence to operate a transmission system within the national boundaries of the Republic of South Africa.

“This is a milestone decision by the Energy Regulator and will immensely contribute in Eskom’s unbundling trajectory,” National Energy Regulator of South Africa (NERSA) Chairperson, Thembani Bukula, said on Friday.

At the 2019 State of the Nation Address, President Cyril Ramaphosa announced that Eskom Holdings SOC Ltd would be unbundled into three wholly owned entities: Generation, Transmission and Distribution.

“The NTC is envisioned to be an independent transmission system operator incorporating, inter alia, the currently non-licensable but integrated functions of network provision, system operation and system planning.

“The NTC’s independence is an important signal to all stakeholders, including investors that they will have non-discriminatory access to the transmission system,” NERSA said.

Furthermore, the NTC is responsible for ensuring grid stability, to which end, it is allowed to buy and sell power, but not for profit.

“However, in terms of section 15(1) of the Act, the NTC will be afforded the opportunity to recover its efficiently incurred costs and a reasonable return on its assets. The Energy Regulator understands that the aforementioned provisions are both within the ambit of the Act and enable the NTC to be operationalised as an independent and reliable transmission system operator,” NERSA said.

The NTC a wholly owned subsidiary of Eskom, which was established as per the Government objectives and in alignment with the Department of Public Enterprises’ (DPE’s) ‘Roadmap for Eskom in a Reformed Electricity Supply Industry’ (‘the White Paper’), issued on 29 October 2019.

The NTC will operate the transmission system and perform the following key integrated roles to ensure the integrity of the interconnected power system (IPS):

• Transmission Network Service Provider (TNSP)
• System Operator (SO)
• Transmission System Planner (TSP)
• Grid Code Secretariat

The NTC’s licence application was processed following due regulatory process, including a public hearing that was conducted on 11 April 2023.

“All presenters that made oral presentations during the public hearing supported the application. NERSA analysed the application to assess whether it meets the minimum requirements for licensing as contained in section 10(2) of the Electricity Regulation Act, 2006 (Act No.4 of 2006) – the Act. The application was found to meet the licensing requirements,” the energy regulator said.

Generation licence application by Ngonyama Solar

The Energy Regulator approved that Ngonyama Solar (RF) (Pty) Ltd be issued with a generation licence as the sixth preferred bidder of the Department of Mineral Resources and Energy’s (DMRE’s) Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) Bid Window Six (BW6).

On 3 March 2023, Ngonyama Solar (RF) (Pty) Ltd was announced as the sixth preferred bidder, with a contracted capacity of 140 MW.

This brings the total contracted capacity for BW6 to 1 000 MW for solar projects.

“Ngonyama Solar’s preferred bidder status letter was issued on 13 March 2023. Ngonyama Solar applied for a generation licence in accordance with section 7 of the Electricity Regulation Act, 2006, which requires that no person may operate a generation facility without a licence issued by the Energy Regulator.

“NERSA analysed the application and found that it met all the licensing requirements. There were no objections received to the application,” the energy regulator said.

The six preferred bidders for all Solar Photovoltaic (PV) technology include Doornhoek PV (Pty) Ltd; Boitumelo Solar Power Plant (RF) (Pty) Ltd; Kutlwano Solar Power Plant (RF) (Pty) Ltd; URSA Energy (RF) (Pty) Ltd; Antlia Energy (RF) (Pty) Ltd and Ngonyarna Solar (RF) (Pty) Ltd. – SAnews.gov.za