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March 18, 2024Concerns are mounting that the recently passed Electricity Amendment Regulation Bill to unbundle Eskom could lead to a collapse of South Africa’s electricity grid, according to energy expert Tshepo Kgadima.
On Thursday, the National Assembly approved the bill aimed at paving the way for the unbundling of the embattled power utility. Simultaneously, the National Energy Regulator of South Africa (Nersa) consented to transfer Eskom’s powers and duties to the new National Transmission Company South Africa (NTCSA).
While sections of the private sector welcomed the move, some political parties, unions, and experts like Kgadima have warned about potential adverse impacts on consumers and the economy.
Kgadima criticized Nersa for failing to consider all available options before deciding to hand over Eskom’s powers. He argued the regulator lacks sufficient expertise in the complexities of South Africa’s electricity market.
“The decision is demonstrable of the dearth of skill, knowledge and expertise within Nersa itself,” Kgadima stated. He claimed the transfer saddles the new NTCSA with a “legacy contract” to purchase expensive but “100% useless” power from renewable independent power producers.
Kgadima warned this will “exacerbate an already dire financial situation of Eskom Group Holdings” and spell a “death knell” for the transmission company before it even begins operations.
Most alarmingly, the expert believes the unbundling will destabilize the electricity grid and lead to insufficient power supply. “If anything, it is going to precipitate the total collapse of the grid, purely because of the decisions that have been made by people who know nothing,” he asserted.
Kgadima called the decision “bizarre and absurd in the extreme”, arguing Eskom should have remained an integrated utility. He claimed it has instead enlarged bureaucracy, worsened dysfunctionality, and “ensured that energy poverty is here to stay, therefore condemning the economy to arrested development.”
As the unbundling process gets underway, Kgadima’s dire warnings have heightened concerns over the potential consequences for South Africa’s already strained power supply and economic prospects.