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South African Eskom to create separate transmission entity by 2020 [free access]

October 31, 2019

The South African government has published a roadmap that says that it will restructure Eskom Holdings SOC Limited (Eskom) by formulating a separate entity for its transmission segment. The roadmap outlines a multiyear process for the unbundling of the vertically-integrated, state-owned utility into three separate utilities each, for generation, transmission and distribution.

 

Over the years, Eskom has been dealing with severe financial stress and has not able to provide a steady power supply.

 

Currently, the transmission system sources power from Eskom’s generators and independent power producers (IPPs), which represent a maximum of 30% of total supply, before distributors deliver it to consumers.

 

The new Transmission Entity (TE) will be a state-owned company falling under Eskom Holdings. It will be functionally separated from the remaining two segments by the end of March 2020, while full legal separation is expected to happen by 2021. The TE will also undertake the system operator’s functions and will be responsible for sustaining system balance by taking up least-cost generation options. The entity will also act as the market operator, whereby it contracts with suppliers and distributors of electricity.