Energy experts welcome transmission licence approval

Energy experts welcome transmission licence approval

Energy experts welcome transmission licence approval

Durban – THE approval of the National Transmission Company of South Africa’s (NTCSA’s) application for a transmission licence by the energy regulator last week is a step in the right direction to address the energy crisis in the country.

This is according to energy experts who were reacting to the announcement that the National Energy Regulator of South Africa (Nersa) had approved the licence.

The NTCSA is a wholly owned subsidiary of Eskom. Eskom said it welcomed the decision.

“The legal separation of Eskom into three entities, namely Generation, Distribution and Transmission, is a strategic objective and key aspect of Eskom’s turnaround plan envisaged in the Department of Public Enterprises.

“The transmission licence decision marks a significant milestone in the legal separation process of the transmission division,” Eskom said.

Energy economist Lungile Mashele said the move was good news.

“It will make life easier in the future as there will be more generators available that can sell directly to the National Transmission Company. This will be achieved by speaking to the company and entering a power purchase agreement with them.

“This means that those that have additional or excess capacity will have a route they may want to follow. It may help with load shedding depending on the capacity that will be coming in.

“It will make things easier in the region. For example, if somebody in Mozambique wants to sell energy they will be able to sell directly to the NTCSA without going to the bid determination by the minister of energy.”

Energy expert Professor Wikus van Niekerk described the move as “good news in general terms”, adding that it paved the way for an independent grid company that could procure power from many generators, including those outside the country’s borders.

Craig Morkel, CEO of iKapa Energy, said he was cautiously optimistic.

“We need to ensure that the grid is accessed, expanded, operated and maintained in a non-discriminatory manner for both state-owned generators, including Eskom, municipalities and private generators.

“The private sector cannot be expected nor trusted to provide electricity to indigent communities as they have a primary objective of realising a profit, whereas a state-owned entity has the responsibility to supply basic services where the market fails to provide universal access to such basic services.”

Morkel said the NTCSA needed to attract investment.

Ruse Moleshe, managing director of RUBK, an energy and infrastructure consulting and advisory company, said: “The licence approval, for now, is only for the transmission system operator function, trading and export/import licences are still pending. The aim is to provide non-discriminatory access for all power generators, including Eskom generation, Independent Power Producers (under the government procurement programme), embedded generators etc.”

Moleshe added that it would make it easier for private companies to access the grid.

“However, selling power is still subject to Nersa approval and is also dependent on investments in grid capacity, which is currently limited in areas where solar and wind resources are most abundant.”