In 2007 when South Africa first encountered load shedding, not many would have guessed that it would become a mainstay of their lives. As if extended periods of blackouts were not enough, citizens have had to grapple with increased electricity tariffs. As of May 2023, the country had faced more load-shedding for the year than it experienced in the whole of 2022.
Eskom, the company responsible for South Africa’s electricity generation, transmission, and distribution, has already asked citizens to brace up for more load-shedding this year. Aside from people being left in the dark for many hours, businesses struggle to survive. Consider MTN, one of Africa’s largest telecoms operators, which blamed load shedding for shaving R695 million ($38 million) off its earnings last year.
Although several governments have made efforts to solve the country’s energy crisis, corruption and sabotage have made these endeavours seem fruitless. But then, there may be hope. An amendment bill to the Electricity Regulation Act (ERA) recently made it to the South African Parliament. Although deliberations on this bill are yet to commence, the fact that it finally got to the lawmakers already sends a strong feeling of hope to all.
The bill seeks to serve as a foundation on which South Africa will build its lasting solution to the power situation. Among the many things it hopes to change, it is worth mentioning that the bill hopes to transform the current sole-buyer electricity market into a free market structure. By extending participation in its electricity business to other companies, the country expects to turn its fortunes around.
Major points of the amendment bill to tackle load shedding
As mentioned, the amendment bill desires to make the country’s electricity market more competitive. The multi-market structure it proposes will comprise three sections: market transactions, physical bilateral transactions, and regulated transactions.
Furthermore, the competitive market model will see the creation of a Transmission System Operator (TSO). The TSO will serve as the supervisor of the competitive market. Aside from transmission planning and managing the transmission system, the TSO will also build a transmission expansion plan that aligns with expected power demand.
Within the TSO, the amendment bill also seeks to establish a central purchase agency. It will buy legacy power purchase contracts and extra energy if necessary to retain system integrity.
The bill also furnishes the National Energy Regulator of South Africa (NERSA) with extra powers. Section 30 empowers NERSA to mediate and offer lasting decisions to disputes between licensees and customers. While Section 14(d) to fix or authorize tariffs, its responsibility to disclose the methodology used in setting the rates is expunged.
How soon before Parliament attends to the electricity bill?
Despite its great importance to citizens, businesses, and the economy in general, the amendment bill took a long while to reach Parliament. Busi Mavuso disclosed that an administrative error was responsible for that. According to her, the Department of Mineral Resources did not submit the bill accordingly.
Mavuso also stated that the legislators did not say anything about the error earlier. These events made her feel that neither party was particularly concerned about solving the country’s energy crisis. Perhaps one important fact to note is that before the bill made it to Parliament, the legislative arm’s schedule was already booked. As such, it is highly unlikely that the bill will be attended to immediately.
“The frustration over the ERA Bill misstep is largely because it is so unnecessary. It is purely a bureaucratic bungle, not one born from the complexity of achieving policy reform. But it has revealed that certain parts of the government are just not serious about delivering the change we need,” Mavuso said.
This further places citizens and businesses in great uncertainty. Load shedding has cost them so much. With more blackouts expected in the coming days, one would expect South African politicians to do what is required of them to solve the problem.
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