KEY POINTS
- Power traders want a detailed, time-bound blueprint defining Eskom’s final structure to support market liberalization.
- Government reforms include splitting Eskom and creating an independent transmission operator to allow private participation.
- Industry players warn unclear or poorly designed policies could undermine competition and distort the evolving electricity market.
Electricity traders in South Africa are urging the government to clearly spell out the final structure and role of Eskom Holdings SOC Ltd, saying this clarity is essential to successfully liberalise the country’s power market.
A report commissioned by the South Africa Electricity Traders Association stresses that ongoing reforms aimed at ending Eskom’s century-long monopoly must include a credible roadmap detailing what the utility will ultimately become and timelines for achieving that transition.
Research firm Kruthum notes that Eskom’s restructuring which separates it into generation, transmission, and distribution subsidiaries is the cornerstone of electricity reform. The report highlights key priorities, including:
Clarifying the future role of its generation arm as aging coal plants are phased out
Separating commercial interests from grid operations
Establishing a financially sustainable balance sheet
These changes are meant to encourage private-sector participation and competition in the power sector.
Recent Policy Shifts and Government Position
South African President Cyril Ramaphosa recently reaffirmed plans to create a fully independent state-owned transmission company, reversing a December decision that would have kept the grid under Eskom’s holding structure.
The utility has pledged support for a government task team charged with setting up the new transmission operator.
After years of crippling power cuts that slowed economic growth, Eskom stabilized the national grid over the past year. Chief Executive Officer Dan Marokane has said the company intends to compete with independent renewable producers as its coal-based fleet is gradually retired.
However, traders warn that poorly designed reforms such as certain contract structures or the creation of an internal renewables unit, could distort the market just as competition is meant to expand.
