Eskom transmission unbundling happening this year and renewables procurement too slow – Pravin Gordhan

  • Public Enterprises Minister Pravin Gordhan delivered his budget vote speech in parliament yesterday.
  • The minister outlined that Eskom unbundling of its transmission division into the National Transmission Company of SA will be operational by November 2023.
  • The people of South Africa face daily blackouts of up to 16 hours this winter. Read more

Going off script, Gordhan stated that the country’s procurement of renewable energy was too slow and the energy plan (integrated resource plan) needs to be updated. The country’s Minister of Mineral Resources and Energy, Mr Gwede Mantashe, has bungled three large procurement tenders since taking office in 2019. Read more

“Renewables elsewhere in the world take a much shorter time to implement than in SA, and we have the opportunity to reduce much of the red tape and shorten the processes required if we have the political will and administrative will to actually do so. Similarly, had IRP 19 (Integrated Resource Plan) been commenced two years ago, we would be in a better position than we are today. Clearly, a new vaccine of urgency needs to be inserted into our systems to ensure red tape is reduced and many of the problems we are faced with overcome in time,” said Gordhan.

Leading takeaways regarding Eskom

Operational and related changes:

  • Emphasized that generation recovery must be complemented by introduction of new capacity to end load shedding.
  • Generation recovery plan to increase Energy Availability Factor to 70% by 31 March 2025.
  • Debt Relief R254 billion with the help of National Treasury.
  • Operationalization of the National Transmission Company of SA by November 2023.
  • Appointment of the NTCSA board. Expected end June 2023.
  • Distribution subsidiary to be corporatized by end December 2023.
  • Finalization of the appointment of the GCEO.
  • Mitigation Strategies for shutdown of Komati Power Station aimed enhancing opportunities for affected workers and communities developed.
  • National Treasury finalizing municipal arrear debt solution.

Strategic initiatives and reforms in line with Roadmap:

  • Expansion and strengthening of the grid as per the Transmission Development Plan to allow new generation capacity (IPPs, gas, batteries, other renewables).
  • Koeberg life extension and steam generator replacements before 31 March 2024 (unit 1 and unit 2).
  • Kusile recovery of units 1, 2 &3 before 31 December 2023.
  • Medupi recovery of unit 4 from generator explosion repairs by July 2024.
  • Completion of new build programme – Commissioning of Kusile unit 6 by May 2024.
  • Eskom restructuring/unbundling

a)    Lenders    consent    engagements    have    been    completed    and response from lenders to be completed before trading.
b)    NERSA to issue a trading, importing and exporting license by July 2023.
c)    The due diligence for the establishment of a Generation Company and New Holdings will be completed by 31 March 2023.
d)    The    Electricity    Regulation    Act    for    the    establishment    of    a competitive market is before parliament for approval.

Link to full speech HERE 

Author: Bryan Groenendaal

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