Amplified calls for Cabinet-endorsed electricity reform roadmap
Amplified calls for Cabinet-endorsed electricity reform roadmap
Independent power producer and licensed trader NOA has amplified a recent call for the publication of a Cabinet-endorsed electricity reform roadmap to ensure that the shift to the competitive market structure envisaged in legislation and policy is implemented.
NOA head of trading Andrew Taylor argued this week that the Electricity Regulation Amendment Act and the impending launch of the South African Electricity Wholesale Market (SAWEM) offered a credible path to a competitive, green and affordable electricity system, but currently lacked an authoritative, coherent and sequenced implementation plan.
“Cabinet should adopt a single, time-bound electricity reform roadmap before the end of the 2026 medium-term budget cycle,” Taylor argued during an EE Business Intelligence webinar.
This appeal was also made in February by the South African Electricity Traders Association (SAETA), of which NOA is a member.
In a report commission by SAETA and produced by research and consulting firm Krutham, it was argued that the roadmap should bring together existing reform strands, while setting clear targets, sequencing and accountability.
In an update released on May 12, Krutham noted that the Department of Electricity and Energy planned to submit its own report to Cabinet which would then go through a public consultation process.
In April, Electricity and Energy Minister Dr Kgosientsho Ramokgopa revealed that the electricity reform policy paper to be presented to Cabinet would offer a “single-window overview of the sector’s reform agenda”.
In his subsequent Budget Vote speech, he announced that his department would also release a “sequenced” implementation roadmap for the SAWEM so as to address prevailing uncertainty over the transition to a competitive market structure.
Krutham MD Peter Attard Montalto added that South Africa had a narrow window to lock in reform and that the roadmap, thus, represented the “most important document the sector will see this year”.
“Without Cabinet approval and a single political champion, reforms remain weakly coordinated, vulnerable to resistance and unable to overcome entrenched interests,” Attard Montalto added, highlighting the relative progress being made in transport reform where a Cabinet-endorsed roadmap was in place.
Taylor also argued that the roadmap should have a single political champion, assign lead responsibilities for each outstanding workstream, and that there should be quarterly progress reports.
The roadmap, he added, should not be a new policy, but a “faithful translation of the policy already passed — sequenced, costed, and owned”.
Besides the roadmap, Taylor also identified two other non-technical interventions that should be pursued with similar urgency: a new Electricity Pricing Policy, for which Ramokgopa has confirmed he will also be seeking Cabinet approval; and a strengthening of the capacity of the Department of Electricity and Energy and the National Energy Regulator of South Africa.
“Each of these three actions is unglamorous. None of them generates a megawatt. None of them opens a substation. And yet, without them, every megawatt and every substation is more expensive, slower to build, and more vulnerable to the next political shock,” Taylor said.
Speaking on the same platform, Saul Musker, who is director of strategy and delivery support in the Office of the Presidency, listed several reform priorities in addition to the work being undertaken by the Eskom Restructuring Task Team to finalise the establishment of a fully independent Transmission System Operator with ownership and control of the transmission assets.
These included finalising trading rules, as well as systems and prices to enable a competitive market; reforming the tariff regime to support the introduction of the SAWEM and sector unbundling; implementing open and non-discriminatory access to the grid and wheeling; expanding and strengthening the transmission network; and supporting municipal distributors to make the transition to a reformed electricity sector.
Describing the electricity market reforms as being at a critical stage, Musker said that the Presidency remained committed to seeing the reforms through.
