South Africa’s energy regulator approves new Transmission Company licence

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

The NTC, which is a wholly owned subsidiary of Eskom, 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 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. Further, 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. 

‘This is a milestone decision by the Energy Regulator and will immensely contribute in Eskom’s unbundling trajectory,’ said Mr Thembani Bukula, the Chairperson of NERSA. 

Author: Bryan Groenendaal

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