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Electricity Regulation Amendment Bill on Track

May 23, 2022

Department of Mineral Resources and Energy

Work on the Draft Electricity Regulation Amendment Bill is wrapping up.

The mineral resources and energy minister, Gwede Mantashe, confirmed this during his department’s 2022 Budget Vote speech in parliament.

The minister indicated that amendments to the Electricity Regulation Act have been proposed to “create a transmission entity, to act as wheeler and dealer of electricity, competitively”.

The draft bill was published for comment in February 2022.

Cabinet approved the publication of the draft bill for comment at a virtual cabinet meeting on 9 February 2022.

In a statement, cabinet pointed out that the proposed legislation broadens the national regulatory framework for the electricity supply industry.

The draft amendments also “align the country with the international best practice in energy and provide for the functions of a Transmission System Operator, and for a licensing framework for power generation, transmission, distribution and trading”.

The draft bill aims to:

• establish a national regulatory framework for the electricity supply industry;
• make the National Energy Regulator of South Africa the custodian and enforcer of the national electricity regulatory framework;
• provide for licences and registration as the manner in which generation, transmission, distribution, system operation, reticulation, trading and the import and export of electricity are regulated;
• provide for the establishment of the Transmission System Operator, to provide a competitive multi market structure for the electricity industry, to regulate the reticulation of electricity by municipalities; and
• provide for matters connected therewith.

According to the draft bill, the Transmission System Operator will be set up to provide for an “open market that will allow for a non-discriminatory competitive electricity trading platform”.

The minister confirmed that the next step is for the draft bill to be tabled in cabinet for approval for tabling in parliament by the end of July 2022.

Proposed amendments to the Electricity Pricing Policy will also be tabled for final approval by cabinet by the end of July 2022.

Other developments highlighted by the minister include:

  • Council for Geoscience has confirmed the verification of the shale gas samples that were tested internationally – environmental assessment approval awaited before the next phase;
  • Gas Master Plan at advanced stage of development following the publication of the Base Case report late last year;
  • Nuclear energy – suspensive conditions from NERSA on Section 34 Determination being addressed – will ensure that the procurement of 2 500 megawatts of nuclear energy is completed by 2024;
  • National Radioactive Waste Disposal Institute has started on project development work for the setting up of the Centralised Interim Storage Facility (CISF) for the storage of used nuclear fuel – feasibility report for the CISF to be submitted to cabinet during the current financial year; and
  • All preliminary work for the incorporation of the South African National Petroleum Company has been finalised and approved by cabinet – will enable the new entity to target R95 billion in potential market opportunities ensuring security of energy supply and creating much needed jobs.