On 1 July 2024 the Department of Public Enterprises (DPE), Eskom SOC Holdings Limited and the National Transmission Company South Africa (NTCSA) announced that the NTCSA has officially started trading. This milestone marks the NTCSA’s establishment as a duly constituted separate, distinct, and wholly owned subsidiary of Eskom Holdings, and is a significant step in the DPE’s Roadmap for Eskom to create a reformed electricity supply industry.
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 legislation, the NTCSA will play the role of the Transmission System Operator and buyer. It will assume additional roles once the Electricity Regulation Amendment (ERA) Bill is passed into law. The NTCSA 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 the NTCSA will assume the additional role of Market Operator. In this capacity, it will provide a platform for generators, consumers, traders, and retailers to trade with one another, as is the case in countries around the world.
The establishment of the NTCSA is a major step in reforming the structure of the electricity market, aiming to enhance efficiency and promote transparency. It will act as a catalyst for substantial improvements and upgrades within the national electricity transmission infrastructure.
Mteto Nyati, Eskom Board Chairman, said, “We are pleased to announce that the 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 of Eskom Holdings, it will operate under the direction of an independent board and provide open access to the electricity network, as envisaged in the unbundling process. We look forward to contributing to a more efficient and transparent electricity industry.”
Priscillah Mabelane, NTCSA Board Chairperson, added, “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, fostering transparency and efficiency. Together, we look forward to shaping a dynamic electricity market. We extend our deepest gratitude to our team, Eskom, the Inter-Governmental Steering Committee comprising the Department of Minerals and Energy, National Treasury and the Shareholder Representative, DPE, for its immense support in achieving this pivotal milestone.”
On 20 June 2024, the merger was duly registered and placed on file by the Companies and Intellectual Properties Commission (CIPC) in terms of Section 116(3) of the Companies Act, 2008. Eskom has continuously engaged with stakeholders, including government and lenders, keeping them informed on the process. There have also been extensive engagements with employees and employee representatives on the legal separation process. Creditors and suppliers too have been kept informed of the merger.
The legal separation of the NTCSA to operate as a separate entity introduces several benefits:
- A competitive electricity market
- Open access to the transmission network
- Enhanced efficiency and transparency.
The NTCSA will operate under the following three licences issued to it by the National Energy Regulator of South Africa (NERSA) for:
- The operation of transmission facilities, operating and managing the transmission grid
- Trading, in terms of which it will buy energy from Eskom generators and IPPs as procured by the Minister of Mineral Resources and Energy (newly, the Minister of Energy and Electricity)
- Import and export, in terms of which it will import and export energy and continue as the trading arm for the trade of energy to and from the Southern African Power Pool (SAPP).
Eskom’s legal separation into three distinct entities: Generation, Distribution, and Transmission, is aligned with its Turnaround Plan and the DPE Roadmap.
Eskom expresses its gratitude to all stakeholders, including employees, the government and lenders, for their support during this transition.
For more information visit: www.eskom.co.za