Electricity Minister Kgosientsho Ramokgopa says Eskom must become “Eskom 2.0” to survive in a competitive electricity market.
Eskom’s 103-year monopoly will end in April 2027, Daily Investor reported. That is when the first private players join the market.
“We are moving away from a vertically integrated monopoly into a market that has been liberalised, and there are multiple actors,” Ramokgopa said.
“We have had 103 years of Eskom 1.0. Now we must transition,” Ramokgopa said.
“We are leaving the Eskom of the past behind us. It continues to be the anchor behind Eskom 2.0, but this Eskom must have a different complexion,” he said.
His department told Parliament about the timeline on 23 September. Private players will work alongside Eskom while a new trading platform is tested.
An independent Transmission System Operator will run the market. It falls under the National Transmission Company of South Africa.
Ramokgopa said Eskom must cut costs and invest in renewable energy so it can compete with private producers.
Eskom 2.0 must pay its own way. Ramokgopa said the government has ruled out future bailouts and double-digit tariff increases.
Eskom carries a debt of R320 billion. The debt has already been cut by R130 billion with help from the National Treasury.
The cost of servicing that debt is one of the main reasons electricity prices have risen so sharply. Eskom 2.0 must make a profit by cutting production costs and stopping revenue losses.
Its green energy arm, Eskom Green, is targeting 2 GW of renewable capacity. Eskom will keep its coal plants and slowly replace them with natural gas.
“We will unveil the 5.2 GW new nuclear plan and a 10 GW nuclear industrialisation plan,” Ramokgopa said.
New power sources will need a bigger transmission grid. Daily Investor said the grid has been neglected for the past two decades.
“We have the ambition of rolling out 14,500 kilometres of new transmission lines. The size of that ticket is R440 billion,” Ramokgopa said.
Eskom is also expected to sell more power to neighbouring countries. Its surplus is growing as businesses and households use less Eskom electricity.
“As you introduce new actors, Eskom’s generation share is going to shrink. This opens up new avenues for Eskom to export excess generation capacity,” Ramokgopa said.
Source: this article is based on reporting by dailyinvestor.com. Image: dailyinvestor.com. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.