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South African Eskom to create separate transmission entity by 2021 [free access]

December 21, 2020

As per news reports, South African state-owned power utility, Eskom Holdings SOC Limited (Eskom), is on track for unbundling its transmission arm and establishing a separate entity by December 2021.

 

As per the restructuring roadmap presented in November 2019, the vertically-integrated utility plans to unbundle into three separate utilities each, for generation, transmission and distribution, by the end of 2022. The three power companies, post the unbundling, will remain under a state-owned Eskom holding.

 

Over the years, Eskom has been dealing with severe financial stress and has not been able to provide a steady power supply.

 

Currently, the transmission system sources power from Eskom’s generators and independent power producers (IPPs), which represent a maximum of 30% of total supply, before distributors deliver it to consumers.

 

The new Transmission Entity (TE) will undertake the system operator’s functions and will be responsible for sustaining system balance by taking up least-cost generation options. The entity will also act as the market operator, whereby it contracts with suppliers and distributors of electricity.

 

The creation of the new TE will also drive a more transparent approach to electricity tariffs.