Sakeliga welcomes signs of reforms in the South African electricity market

16 May 2019

Sakeliga welcomed energy minister Jeff Radebe’s decision to open the way for private industry to contribute electricity into the grid. This follows his decision to permit NERSA to license a number of applications without having to wait for the finalisation of the new Integrated Resource Plan.

“Much still, however, remains to be done. The ball is in NERSA’s court to approve these applications in a timeous manner. In addition, a great deal of bureaucratic overhead still impedes free access to the electricity market,” according to Daniel du Plessis, legal analyst at Sakeliga.

Sakeliga believes the minister is entirely correct in asserting that the traditional model of electricity provision does not suit South Africa’s current situation. It therefore reiterates its call for a distributed network of private electricity generators.

“The real test still lies ahead – will the minister and regulator, in the first instance, use the existing regulations to their fullest extent to make entry into the market as easy as possible? Secondly, will parliament and the minister take steps to address serious problems in the way the Electricity Regulation Act and its associated regulations are structured at present?”

Sakeliga has also taken issue with the Presidency’s apparent reluctance to allow market forces to operate in the electricity sector. The President most recently reiterated his commitment to a state-operated power utility at the recent Goldman Sachs Investment Conference on Wednesday.

“President Ramaphosa’s stated intent not to privatise ESKOM does not bode well for a private and robust electricity grid. This should be deeply concerning to everyone still being held ransom by state-provided power,” du Plessis concluded.

Issued by Moira-Marie Kloppers, Head of Media and Advertising, Sakeliga, 16 May 2019