Transmission company on track to start trading by July, says Ramokgopa
Competition is expected to lower energy prices
22 April 2024 - 17:36
by Denene Erasmus
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The National Transmission Company of SA (NTCSA), which has been established as part of the unbundling of Eskom’s generation, distribution and transmission businesses, is expected to start trading by the beginning of July.
This is about three months later than planned. Eskom previously said that it expected the NTCSA to begin operating from April 1.
Electricity minister Kgosientsho Ramokgopa told the media on Monday that the NTCSA had met all the requirements necessary to be established and operationalised.
“We project that the NTCSA is on track to start trading by July 1. This will ensure fairness and equitable engagement with all players [in the electricity trading market],” he said.
One of the benefits to SA consumers, Ramokgopa said, would be lower energy prices. “The introduction of competition will drive down electricity prices by allowing buyers to procure from the seller offering lowest prices.”
The NTCSA, which will function as an interim facility taking on the role of the transmission system operator (TSO), will set up a market platform through which electricity can be bought and sold by multiple buyers and sellers.
Before the TSO can be established the Electricity Regulation Amendments Bill has to be signed into law, thus providing a legal framework for operationalising the TSO.
The establishment of the TSO will also insulate the trading platform from Eskom’s generation interests, thus removing the conflict of interest where Eskom is both a generator, owner and operator of a monopoly transmission grid.
The Electricity Regulation Amendments Bill is with the National Council of Provinces (NCOP), which has invited the public to submit written comments before April 29. Time is running out for it to be passed by the NCOP, and signed into law by the president before the May general election, but Ramokgopa previously said that the state and the legislature had agreed to prioritise the bill.
On Monday, Ramokgopa also addressed statements by opposition leaders such as the EFF’s Julius Malema, who said SA will go back to stage 6 load-shedding after the election.
Ramokgopa rejected claims the suspension of load-shedding since late March had anything to do with the upcoming general election.
Instead, Eskom has been better able to meet demand because of factors ranging from an improvement in generation performance to lower demand. By Monday, SA had had experienced 26 consecutive load-shedding-free days.
“We are much closer to the end of load-shedding, and while we should celebrate this milestone the reliability [of the coal fleet] is still a problem. We can’t say load-shedding is behind us, but we are making good progress.”
Data published by Eskom showed the energy availability factor (EAF), a measure of total electricity generation output as a share of total installed generation capacity, was at about 58% for the first three weeks of April. In January and February, the EAF was below 52%, and it averaged 54.5% in March.
Eskom has also cut back on maintenance. From December to February, the utility implemented higher-than-usual levels of planned maintenance, taking about 8,000MW of capacity offline. This has now been reduced to about 5,000MW.
Ramokgopa said Eskom was not keeping the lights on by burning more diesel to run the open-cycle gas turbines (OCGT). “Some are saying Eskom is burning diesel to improve [the ANC’s] election prospects. This is one of the falsehoods being pedalled.”
According to Ramokgopa, the OCGT utilisation rate had decreased since the beginning of the year.
Eskom has said that it planned to budget much less for diesel use in the 2024/25 financial year, as it expected less reliance on the diesel-powered emergency generation fleet.
On Monday, the utility was unable to provide Business Day with a figure, but indicated it would hold a briefing on Friday when it would share information on the diesel budget for the current financial year.
The OCGTs delivered about 170GWh during the first three weeks of April compared with 470GWh for the whole of April last year, which means Eskom is on track to almost halve its OCGT use for the month.
Eskom’s senior manager in the group executive generation office, Eric Shunmagum, said on Monday the utility spent R33bn on diesel in the year to end-March. This was about 10% more than its R30bn budget for the year.
Poor economic conditions that were weighing in energy-intensive industries such as mining, as well as the rapid increase in renewable power generation (especially rooftop solar power for households and small businesses), were having an impact on energy demand from Eskom.
In its interim results for the six months to end-September, Eskom said its sales volumes had decreased by 6% compared with the same period last year. This was the result of load-shedding and lower electricity demand from customers.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Transmission company on track to start trading by July, says Ramokgopa
Competition is expected to lower energy prices
The National Transmission Company of SA (NTCSA), which has been established as part of the unbundling of Eskom’s generation, distribution and transmission businesses, is expected to start trading by the beginning of July.
This is about three months later than planned. Eskom previously said that it expected the NTCSA to begin operating from April 1.
Electricity minister Kgosientsho Ramokgopa told the media on Monday that the NTCSA had met all the requirements necessary to be established and operationalised.
“We project that the NTCSA is on track to start trading by July 1. This will ensure fairness and equitable engagement with all players [in the electricity trading market],” he said.
One of the benefits to SA consumers, Ramokgopa said, would be lower energy prices. “The introduction of competition will drive down electricity prices by allowing buyers to procure from the seller offering lowest prices.”
The NTCSA, which will function as an interim facility taking on the role of the transmission system operator (TSO), will set up a market platform through which electricity can be bought and sold by multiple buyers and sellers.
Before the TSO can be established the Electricity Regulation Amendments Bill has to be signed into law, thus providing a legal framework for operationalising the TSO.
The establishment of the TSO will also insulate the trading platform from Eskom’s generation interests, thus removing the conflict of interest where Eskom is both a generator, owner and operator of a monopoly transmission grid.
The Electricity Regulation Amendments Bill is with the National Council of Provinces (NCOP), which has invited the public to submit written comments before April 29. Time is running out for it to be passed by the NCOP, and signed into law by the president before the May general election, but Ramokgopa previously said that the state and the legislature had agreed to prioritise the bill.
On Monday, Ramokgopa also addressed statements by opposition leaders such as the EFF’s Julius Malema, who said SA will go back to stage 6 load-shedding after the election.
Ramokgopa rejected claims the suspension of load-shedding since late March had anything to do with the upcoming general election.
Instead, Eskom has been better able to meet demand because of factors ranging from an improvement in generation performance to lower demand. By Monday, SA had had experienced 26 consecutive load-shedding-free days.
“We are much closer to the end of load-shedding, and while we should celebrate this milestone the reliability [of the coal fleet] is still a problem. We can’t say load-shedding is behind us, but we are making good progress.”
Data published by Eskom showed the energy availability factor (EAF), a measure of total electricity generation output as a share of total installed generation capacity, was at about 58% for the first three weeks of April. In January and February, the EAF was below 52%, and it averaged 54.5% in March.
Eskom has also cut back on maintenance. From December to February, the utility implemented higher-than-usual levels of planned maintenance, taking about 8,000MW of capacity offline. This has now been reduced to about 5,000MW.
Ramokgopa said Eskom was not keeping the lights on by burning more diesel to run the open-cycle gas turbines (OCGT). “Some are saying Eskom is burning diesel to improve [the ANC’s] election prospects. This is one of the falsehoods being pedalled.”
According to Ramokgopa, the OCGT utilisation rate had decreased since the beginning of the year.
Eskom has said that it planned to budget much less for diesel use in the 2024/25 financial year, as it expected less reliance on the diesel-powered emergency generation fleet.
On Monday, the utility was unable to provide Business Day with a figure, but indicated it would hold a briefing on Friday when it would share information on the diesel budget for the current financial year.
The OCGTs delivered about 170GWh during the first three weeks of April compared with 470GWh for the whole of April last year, which means Eskom is on track to almost halve its OCGT use for the month.
Eskom’s senior manager in the group executive generation office, Eric Shunmagum, said on Monday the utility spent R33bn on diesel in the year to end-March. This was about 10% more than its R30bn budget for the year.
Poor economic conditions that were weighing in energy-intensive industries such as mining, as well as the rapid increase in renewable power generation (especially rooftop solar power for households and small businesses), were having an impact on energy demand from Eskom.
In its interim results for the six months to end-September, Eskom said its sales volumes had decreased by 6% compared with the same period last year. This was the result of load-shedding and lower electricity demand from customers.
erasmusd@businesslive.co.za
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