Game-changing electricity bill spells end of Eskom monopoly: 'President needs to sign it before election'

An electricity bill set to revolutionise South Africa's electricity sector has been approved by the National Council of Provinces (NCOP).

The Electricity Regulation Amendment Bill now needs to be signed into law by President Cyril Ramaphosa.

Bruce Whitfield asks energy analyst Chris Yelland to explain in basic terms what this development could mean for the country.

While the bill is not perfect, it is something that certainly should be brought into law as a matter of great urgency says Yelland, preferable before the upcoming election.

He explains that the legislation puts in place the legal and policy framework for the restructuring of the electricity supply industry in South Africa.

Importantly, it also then allows for the restructuring of Eskom to create an independent transmission grid company.

While this will initially be a subsidiary of Eskom Holdings, Yelland goes on, within five years it will become an independent grid company.

"It will also be what we call the independent system operator that operates the transmission system, as well as a market operator which introduces an electricity market."

"This is absolutely critical as we move away from a monopoly generator to a diversified and competitive generation sector, which is what's really necessary to attract new investment into the generation sector because Eskom doesn't have the balance sheet or the money to do this."

"It also establishes the transmission company, or an independent company free of the toxic debt burden of Eskom Generation currently, so they've put it in a position to raise capital."

Chris Yelland, MD - EE Business Intelligence

While there HAS been a significant improvement in Eskom's operational performance, Yelland says, there's been no significant change in its financial or environmental sustainability.

He notes that this restructuring is not something brought in specifically to end loadshedding now, but it is something that's necessary to prepare the sector for a future very different from the current monopoly.

A winter with no load shedding is within reach, says Electricity Minister