TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentralTechCentral
    NEWSLETTER
    • News

      South Africa’s ‘silent revolution’ as those with cash go solar

      15 August 2022

      SA coal giant Seriti Resources in pivot to renewables

      15 August 2022

      Tencent, TikTok share details of prized algorithms with Beijing

      15 August 2022

      Fixing SA’s power crisis is not complex: it simply takes the will to do better

      12 August 2022

      Consortium makes unsolicited bid for state’s 40% stake in Telkom

      12 August 2022
    • World

      Institutions eye crypto but retail investors remain nervous

      15 August 2022

      Tencent woes mount, even after $560-billion selloff

      12 August 2022

      Huawei just booked its first sales rise since US blacklisting

      12 August 2022

      Apple remains upbeat about iPhone sales even as Android world suffers

      12 August 2022

      Ether at two-month high as upgrade to blockchain passes major test

      12 August 2022
    • In-depth

      African unicorn Flutterwave battles fires on multiple fronts

      11 August 2022

      The length of Earth’s days has been increasing – and no one knows why

      7 August 2022

      As Facebook fades, the Mad Men of advertising stage a comeback

      2 August 2022

      Crypto breaks the rules. That’s the point

      27 July 2022

      E-mail scams are getting chillingly personal

      17 July 2022
    • Podcasts

      Qush on infosec: why prevention is always better than cure

      11 August 2022

      e4’s Adri Führi on encouraging more women into tech careers

      10 August 2022

      How South Africa can woo more women into tech

      4 August 2022

      Book and check-in via WhatsApp? FlySafair is on it

      28 July 2022

      Interview: Why Dell’s next-gen PowerEdge servers change the game

      28 July 2022
    • Opinion

      No reason South Africa should have a shortage of electricity: Ramaphosa

      11 July 2022

      Ntshavheni’s bias against the private sector

      8 July 2022

      South Africa can no longer rely on Eskom alone

      4 July 2022

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»Sections»Energy»Beginning of the end of Eskom’s monopoly

    Beginning of the end of Eskom’s monopoly

    Energy By Antoinette Slabbert30 October 2018
    Facebook Twitter LinkedIn WhatsApp Telegram Email

    The Democratic Alliance announced on Monday that it will revive legislation to break Eskom’s monopoly on the generation and transmission of electricity by introducing a private member’s bill.

    The proposed bill will provide for the establishment of an independent system and market operator (Ismo) owned by the state that will buy electricity from electricity generators, including Eskom.

    “The operator will function as a wholesaler of electricity that sells electricity to distributors and customers at a wholesale tariff,” states the DA. “The Ismo will function independently to electricity generation businesses to ensure fairness between generators, encouraging competition and innovation.”

    The Ismo will function independently to electricity generation businesses to ensure fairness between generators, encouraging competition and innovation

    The move will revive a bill first introduced by the minister of energy in 2012 and then withdrawn in 2014.

    Eskom spokesman Khulu Phasiwe said in response to the DA’s plans that the concept of an Ismo is government policy and that Eskom supports it.

    He added that Eskom is working on a new corporate plan that will look at several options for the future of the utility, including the impact that the removal of the transmission function would have on Eskom.

    He said all stakeholders, including the department of energy, would have to be consulted about the restructuring of electricity supply and chart a way forward with regard to existing power purchase agreements.

    A crucial element of the DA proposal is that it aims to empower metropolitan municipalities to buy electricity directly from power producers, without going through the Ismo or any other third party.

    Court action

    Cape Town mayor Patricia de Lille earlier threatened court action to enable the city to bypass Eskom and buy electricity directly from renewable power producers.

    Meridian Economics regulatory economist Grové Steyn says there are three elements to the Ismo. The first is ownership and management of the transmission network. He says the original Ismo Bill did not provide for the unbundling of these assets from Eskom.

    The second is the market operator that buys electricity from various generators and sells it to distributors and consumers.

    Buyers typically contract in advance for their power requirement per time slot — be it for every hour or half hour of the day.

    At a certain point the bidding closes and the system operator, which represents the third element, schedules its different suppliers according to predetermined rules or priorities, much as it does currently. Real-time demand never exactly matches the prior orders and the system operator has several levers it can use to fill the gaps, at predetermined prices.

    Steyn says existing power purchase agreements, including those in early bid rounds of the department of energy’s renewable energy independent power producer procurement (REIPPP) programme that came at a hefty premium, will have to be factored in.

    The introduction of an Ismo would do away with the current perception that Eskom favours its own generation plants

    Government bound itself to buying that power at a fixed rate, which is adjusted annually by the inflation rate, for 20 years.

    That should not be an insurmountable obstacle and won’t stop the introduction of competition in the electricity sector, says Steyn.

    Thembani Bukula, CEO of electricity exchange PowerX and former energy regulator (Nersa) member for electricity, says the Ismo concept is inherent in most deregulated electricity industries.

    He says it will enable the different divisions currently situated in Eskom to stand alone with no cross-subsidisation.

    Bukula says the transmission business is one of the better functioning parts of Eskom, but is overshadowed by problems in generation.

    He adds that the introduction of an Ismo would do away with the current perception that Eskom favours its own generation plants and would lead to greater transparency, which would be conducive to investment.

    The unbundling of the transmission network will impact on Eskom’s balance sheet as it represents about 10% of the utility’s assets, Bukula says. He does not think that should be a problem, since Eskom does not currently plan any big capacity expansion that would require a strong balance sheet.

    Having to compete with other generators should put pressure on Eskom’s generation business to operate more efficiently, he says.

    DA leader Mmusi Maimane says the DA will now refer the bill to parliamentary legal services and issue a call for public comment to be published in the Government Gazette. Thereafter, the Ismo Bill will be tabled in the national assembly.

    • This article was originally published on Moneyweb and is used here with permission
    Eskom Mmusi Maimane top
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleMass retrenchments at the SABC: up to a third of staff to go
    Next Article PlayStation heads for record year

    Related Posts

    South Africa’s ‘silent revolution’ as those with cash go solar

    15 August 2022

    SA coal giant Seriti Resources in pivot to renewables

    15 August 2022

    Tencent, TikTok share details of prized algorithms with Beijing

    15 August 2022
    Add A Comment

    Comments are closed.

    Promoted

    Seven reasons your business needs IP surveillance cameras

    15 August 2022

    5G your life for faster, more reliable home or mobile connectivity

    15 August 2022

    World’s fastest compact firewall for hyperscale data centres, 5G networks

    15 August 2022
    Opinion

    No reason South Africa should have a shortage of electricity: Ramaphosa

    11 July 2022

    Ntshavheni’s bias against the private sector

    8 July 2022

    South Africa can no longer rely on Eskom alone

    4 July 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.