- The updated Regulatory Rules on Network Charges for Third-Party Transportation of Energy have been released by the Department of Electricity and Energy.
- The updated rules, also referred to as the electricity wheeling framework, were revealed by Minister Kgosientsho Ramokgopa during a media briefing yesterday.
Electricity wheeling is the delivery of electricity by a generator to a customer in another area using existing distribution or transmission networks. The Minister touted the move as the “most consequential intervention” in South Africa’s electricity sector.
“It’s going to help us remake the energy and electricity landscape in the country and…bring into life what was envisaged in the Energy Action Plan that the President enacted in July 2022. It’s also consistent with our objective of ensuring that we are able to achieve energy security in the country. We are able to diversify generation sources and we don’t only rely on Eskom for electricity generation in the country,” he said.
Conditions for third-party participation include:
- Participants must be licensed and registered with the National Energy Regulator of South Africa (NERSA);
- Power purchase agreements, connection and use-of-system agreements must be appropriately concluded;
- Grid code compliance and auditable metering required.
Open access
The updated wheeling framework is aimed at supporting open access to the electricity network which will allow consumers to choose power sources – enabling competition and lowered electricity prices.
The rules are also aimed at:
- Non-discriminatory access: Ensuring equal access to the grid for all users.
- Cost reflective tariffs: Charges to reflect the actual cost of network use.
- Fairness and equity: Balance the interests of customers and licensees with non-biased tariffs.
- Transparency: Promote unbundled tariffs that show true costs, subsidies and levies.
- Network reliability: Maintain the integrity of the security of the grid during wheeling.
- Standardisation: Create consistent processes across all network service providers.
- Regulatory certainty: Reinforce NERSA’s role in governing fair and transparent access.
- Just Energy Transition: Enable access to renewable energy through wheeling.
The Minister said this brings the reforms announced by the President to life.
“…We are democratising this space. We are not just relying on Eskom as a sole generator of electricity, there will be multiple generators of electricity. And with competition comes efficiency, comes innovation, research and investment, and we are likely going to drive the prices down.
“That’s why when we talk about affordable electricity, these are part of the elements [and]the components that are going to make it possible for us to make energy affordable for everyone, including the poor and downtrodden and those that are in villages, those are who are in peri-urban areas,” Ramokgopa concluded.
Link to the full updated rules document HERE
Author: Bryan Groenendaal
