The Department of Energy (DoE) would complete the development of legislation for the creation of an Independent Systems and Market Operator (ISMO) in electricity by the end of May, after which it would be sent to Cabinet for further deliberation.

Director-General Nelisiwe Magubane told Engineering News Online that an independent legal evaluation of the concept paper outlining the stages and duties of the ISMO was recently completed. The legal opinion obtained indicated that the department was "on the right track", she said.

The ISMO is expected to buy power arising from independent power producers (IPPs), the emergence of which has been constrained by several regulatory gaps, as well as the fact that Eskom, which is currently the single buyer of IPP power, is not only cash-strapped, but perceived as a conflicted participant.

While the ISMO would initially only procure power from IPPs, it was envisaged that this entity would evolve, over time, into a fully-fledged system and market operator.

The DoE was also working on what guarantees government would need to make available to ensure that ISMO ran smoothly.

"The more transparency we have, the more likely we are to see IPPs contribute," said Magubane, stressing the importance of adequate policy in this regard.