In a statement on Friday, Nersa said the decision of the Energy Regulator recognised the profound changes anticipated in the electricity sector and the role of the Energy Regulator, heralded by the amended ERA, which includes the establishment of a competitive electricity market over the next five years.
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Banele Ginidza
The National Energy Regulator of South Africa (Nersa) has ticked the right boxes in the appointment of an electricity advisory forum expected to help it navigate the robustly changing energy market, market commentators have said.
This comes as Nersa last week announced its approval for the appointment of an advisory body, the Electricity Market Advisory Forum (EMAF), will advise Nersa on various matters related to the establishment of a competitive electricity market.
In a statement on Friday, Nersa said the decision of the Energy Regulator recognised the profound changes anticipated in the electricity sector and the role of the Energy Regulator, heralded by the amended ERA, which includes the establishment of a competitive electricity market over the next five years.
"The EMAF is a proactive move to involve stakeholders to support the Energy Regulator to establish a robust and inclusive regulatory environment to oversee the nascent electricity market," Nersa said.
It added that with the implementation of the Electricity Regulation Amendment Act fostering a more competitive electricity sector, it was vital that the monopolistic control and influence of Eskom over the sector be mitigated.
The establishment of EMAF comes amidst increasingly strained with powewr utility Eskom and the Department of Electricity and Energy, wth Minister Kgosientso Ramokgopa in the past hinting that the regulator needed to improve its capacity in tariff determination and nuclear procurement.
The latest tiff includes Ramokgopa in August last year alluding to that the regulator mishandled the process through which it issued a formal concurrence for the Minister of Petroleum Resources and Energy to procure 2 500MW in September 2023.
This led to the Minister withdrawing the determination published in the Government Gazette in January for the procurement of 2 500MW of nuclear power — paving the way for the government to open a bidding round for nuclear energy.
The intention to procure nuclear has since been reinstated Democratic Alliance (DA) representative on energy, Kevin Mileham, saying the appointment by Nersa of an Electricity Market Advisory Forum was an important step towards including other voices from outside of government and Eskom into the discussion about what a competitive electricity market looks like and how it should operate.
Mileham said the DA has long called for the private sector to play a greater role in addressing South Africa's energy crisis and to have a greater say in what the regulatory environment should look like.
"It cannot be acceptable that only Eskom determines the future of South Africa's electricity sector, especially when one considers the failures of the past two decades," Mileham said, adding that it was hoped EMAF's members will be broadly representative of the sector as a whole, rather than just connected cadres and cronies.
Nersa said the EMAF is a proactive move to involve stakeholders to support the Energy Regulator to establish a robust and inclusive regulatory environment to oversee the nascent electricity market.
It said this included licensing the Market Operator as the National Transmission Company of South Africa’s (NTCSA) licensed activity and approving the Market Rule and Market Code.
"The impending electricity market will involve regulatory activities that are novel in the South African environment – such as the task of market surveillance and enforcement alluded to in the draft South African Wholesale Electricity Market (SAWEM) Code," Nersa said.
"The Energy Regulator, cognisant of the need to garner advice from stakeholders and experts, also appreciates the need to simultaneously accelerate institutional strengthening as a key enabler for an efficient electricity market."
The advisory forum will initially focus on advising the Energy Regulator on the finalisation of the Market Rule and Market Code. The EMAF will also advise on key enablers required to establish a competitive electricity market, including the implementation of the Market Rule and Market Code and regulatory oversight of market operations.
Nersa said it would outline the process for appointing members to the EMAF in due course.
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