The Energy Regulator’s decision to transfer the transmission facilities licence to the National Transmission Company South Africa (NTC) is indeed a “milestone”, as was highlighted by the National Energy Regulator of South Africa (Nersa) when the approval was made in late July.
It is an important signal that the vertical separation of Eskom into independently governed and managed generation, distribution and transmission entities is belatedly under way, with such unbundling having been envisaged a quarter of a century ago in the 1998 White Paper.
As with just about every previous reform in the electricity sector, however, it is not quite the milestone it should have been.
The Energy Regulator, which is Nersa’s highest decision-making structure, has thus far considered only one of the three licence applications made as part of a bundled submission that also included a request to have Eskom’s trading and import/export licences transferred to the NTC.
The decision to adjudicate each licence separately means that the NTC is not in a position to be fully operationalised.
It also probably means that at least one of the other two conditions for its separation, that of securing lender consent, will have to be postponed until the other two licences are approved.
Even though it should have no direct bearing on the other condition – the appointment of an independent board – the delayed licence adjudication could possibly also delay that process.
Sadly, such stop/start reform progress is par for the course in South Africa.
Many will no doubt recall how the regulator initially responded to the reform that allowed distributed generation facilities below 100 MW in size to proceed without a licence (a cap that was eventually removed altogether).
The regulator found a way to convert the registration process into a quasi-licensing process.
This left the reform relatively impotent until Operation Vulindlela intervened to ensure that Nersa acted within the spirit of the reform, which was all about removing red tape so as to allow for the speedy addition of new private generation.
Likewise, all South Africans have witnessed the feet dragging by government, Eskom and the regulator in ensuring that the conditions were truly in place for the accelerated public and private procurement of much-needed electricity as loadshedding began to bite.
Astonishingly, not one kilowatt-hour of publicly procured electricity has entered the network since the restart of the programme in 2021.
There is also little prospect of the Electricity Regulation Amendment Bill, which contains the legislative changes needed to place South Africa’s failing electricity sector on a more sustainable footing, actually being passed by Parliament ahead of the 2024 elections.
The Bill was approved by Cabinet in April but was only tabled in July and no formal programme has been outlined for its passage during the current Parliamentary term.
In the context of ongoing and intense loadshedding, this lack of urgency is shocking yet not surprising, with so many still seemingly content to play politics with the power crisis.