Ramaphosa backs electricity reform

by SAVIOUS KWINIKA 
JOHANNESBURG, (CAJ News) – PRESIDENT Cyril Ramaphosa says South Africa must move beyond ending load shedding and focus on building an electricity system that is reliable, affordable and increasingly clean.

In a letter to South Africans, Ramaphosa said the country’s energy crisis had demonstrated the dangers of relying overwhelmingly on Eskom to meet the electricity needs of the entire economy.

“Overcoming load shedding was never the end of our work,” he said, identifying high electricity costs as the next major challenge facing households and businesses.

The President said expensive electricity was increasing pressure on families already struggling with the rising cost of living, while making South African companies less competitive and discouraging investment in job-creating industries.

Government is therefore pursuing fundamental reforms to create a competitive electricity market in which public and private generators can compete to supply power at the lowest possible cost.

Central to the reforms is the establishment of an independent, state-owned Transmission System Operator (TSO), which will own and control the national transmission network and operate the electricity market.

The TSO is intended to provide fair and equal access to the grid, allowing Eskom and independent power producers to compete on a level playing field while unlocking investment in transmission infrastructure.

Ramaphosa stressed that the reforms do not amount to privatising Eskom.

“Eskom will remain state-owned and must get into the renewable energy market to compete effectively with new power generators,” he said.

He added that the transmission grid would remain a strategic national asset under state ownership and that the restructuring would be undertaken in a manner that protects Eskom’s financial position and the interests of its lenders.

Workers would also be protected, with government committing to ensuring that no jobs are lost directly as a result of establishing the TSO and that organised labour is consulted throughout the process.

The reforms come as Eskom’s operational performance improves significantly.

The utility recently reported a year-to-date Energy Availability Factor of 67,87 percent, its highest since 2020, while unplanned outages have fallen sharply and diesel expenditure has declined by 82,38 percent year-on-year.

South Africa has also gone more than a year without load shedding, according to government, marking a significant turnaround from the electricity crisis that previously disrupted households and businesses.

Ramaphosa said South Africa’s abundant solar and wind resources could make cheaper, cleaner electricity a competitive advantage, supporting industrialisation, investment, new industries such as green hydrogen and electric vehicles, and job creation.

The Eskom Restructuring Task Team is overseeing the reforms, with government having already endorsed the first phase of work towards establishing the independent TSO.

– CAJ News