SA Government moves to deal with Eskom and energy conundrum

SOUTH AFRICA - In Brief 29 Oct 2019 by Iraj Abedian
Minister Pravin Gordhan today released his government’s Special Policy Paper on Eskom, its restructuring, and the country’s energy transition over the next decade. Key and critical interventions are as follows: Eskom’s debt will be restructured in consultation with the stakeholders, but underpinned by a restructured and commercially viable Eskom. The Minister refers to this as “the Eskom of the Future”. Eskom of the Future, the Minister was at pain to highlight, is in line with Government’s recently released Integrated Resource Plan (IRP 2019)In terms of Eskom’s commercial and operational restructuring, the Eskom Holding will be split into three distinct and commercially separate entities of:GenerationTransmission & System Operator (Electricity Market), andDistribution.Each will have its own governance and financial structures as well as financial performance requirements.Importantly, within the Generation entity, Eskom’s current 16 generation units will be clustered into 3 or possibly 4 clusters that would need to be run commercially (profitably), and compete amongst themselves in selling to the Electricity Market. They would be further competing with the private sector generators who will be supplying the Electricity Market.As the old Eskom generators are de-commissioned, Eskom will consider generation of green energy and/or adoption of ‘clean coal technologies’ in full compliance with the environmental regulations and emission standards.Transmission & System Operator (Electricity Market) would ensure system stability in terms of supply and demand.Timeline for the completion of the above restructuring is March 2020, and the implementation begins tomorrow.The Eskom Bo...

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