Our operating environment
The electricity supply industry in South Africa consists of the generation, transmission, distribution and sales, as well as the importing and exporting of electricity. Eskom is a key player in the industry, as we operate most of the base-load and peaking capacity. As noted earlier, we sell electricity to a variety of customers, including to municipalities, who distribute power to end users under licence.
IPPs have been invited to participate through a renewable energy programme run by the Department of Energy (DoE). Potential players were shortlisted and successful bidders have been contracted to supply energy into the national grid owned by Eskom. All grid planning is done by us, lines are constructed under specific licensing criteria and conform to a National Grid Code which is overseen and regulated by NERSA, South Africa’s energy regulator.
The Integrated Resource Plan 2010-2030 (IRP 2010) sets out South Africa’s long-term energy needs and discusses the generating capacity, technologies, timing and costs associated with meeting that need. The electricity market is regulated by NERSA in terms of the National Energy Regulatory Act, 2004. NERSA issues licences, regulates all tariff increases, provides national grid codes, etc.
The National Nuclear Regulator (NNR) ensures that individuals, society and the environment are adequately protected against radiological hazards associated with the use of nuclear technology, and in our case, regulates Koeberg, our nuclear power station.
The Independent System Market Operator (ISMO) Bill was a proposal to restructure the existing market, with one dominant player within a regulated market managing the overall value chain of electricity generation, transmission and the bulk sale of electric power. A proposed independent system operator, with or without transmission assets being incorporated into the structure, was considered in terms of legislation, but the ISMO Bill has since been retracted.
We support Government’s proposal of drafting a new Electricity Bill, which will replace the ISMO Bill and will accommodate the entry of IPPs while allowing the System Operator to manage the current supply situation without extraneous distractions, thereby
minimising potential interruptions to supply.
The Southern African Power Pool (SAPP) is made up of South Africa, Botswana, Lesotho, Mozambique, Namibia, Swaziland, Zambia and Zimbabwe, connected through an integrated grid.