If Eskom retained its transmission assets after its unbundling into three separate entities, insufficient new generation will be added over the next few years, necessitating the return of load-shedding.
That is the warning from Anton Eberhard, emeritus professor of the University of Cape Town Power Futures Lab, who recently expressed concerns about government’s revised unbundling strategy for Eskom.
The strategy, published by electricity and energy minister Kgosientsho Ramokgopa, maintains the break-up of Eskom into generation, transmission, and distribution divisions.
However, it places the entities under a single Eskom holding company, rather than making them fully independent, as was widely expected after President Cyril Ramaphosa’s announcement in 2019.
The National Transmission Company of South Africa (NTCSA) has been legally separated from Eskom for a year and a half, but remains operationally part of the utility.
Eberhard argues that keeping the transmission assets under Eskom will undermine fair and transparent access to the grid and power market by competing generators and traders.
“The intention of the Electricity Regulation Act Amendments is the creation of an independent Transmission System Operator (TSO) outside of Eskom,” Eberhard said.
“The TSO is designated as the transmitter, system operator and market operator and will also house a new Central Purchasing Agency to be the counterparty to legacy and vesting contracts.”
The first big problem with the TSO remaining under Eskom is that it will make it challenging to mobilise capital for the vast transmission grid expansion required over the next few years.
“An independent transmission company will have a predictable, regulated income, which is attractive to institutional investors,” Eberhard said.
“It will migrate over time to investment grade, and the TSO will be able to access competitively priced capital for grid expansion.”
Eberhard said that this would not be possible if the assets remained within Eskom Holdings, which is highly indebted.
“The proposed independent transmission projects will not mobilise all the capital required, and the process has been too slow and tentative,” he said.
Eskom will frustrate private power generation
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Energy7.01.2026
Return of load-shedding in South Africa
By Hanno Labuschagne
If Eskom retained its transmission assets after its unbundling into three separate entities, insufficient new generation will be added over the next few years, necessitating the return of load-shedding.
That is the warning from Anton Eberhard, emeritus professor of the University of Cape Town Power Futures Lab, who recently expressed concerns about government’s revised unbundling strategy for Eskom.
The strategy, published by electricity and energy minister Kgosientsho Ramokgopa, maintains the break-up of Eskom into generation, transmission, and distribution divisions.
However, it places the entities under a single Eskom holding company, rather than making them fully independent, as was widely expected after President Cyril Ramaphosa’s announcement in 2019.
The National Transmission Company of South Africa (NTCSA) has been legally separated from Eskom for a year and a half, but remains operationally part of the utility.
Eberhard argues that keeping the transmission assets under Eskom will undermine fair and transparent access to the grid and power market by competing generators and traders.
“The intention of the Electricity Regulation Act Amendments is the creation of an independent Transmission System Operator (TSO) outside of Eskom,” Eberhard said.
“The TSO is designated as the transmitter, system operator and market operator and will also house a new Central Purchasing Agency to be the counterparty to legacy and vesting contracts.”
The first big problem with the TSO remaining under Eskom is that it will make it challenging to mobilise capital for the vast transmission grid expansion required over the next few years.
“An independent transmission company will have a predictable, regulated income, which is attractive to institutional investors,” Eberhard said.
“It will migrate over time to investment grade, and the TSO will be able to access competitively priced capital for grid expansion.”
Eberhard said that this would not be possible if the assets remained within Eskom Holdings, which is highly indebted.
“The proposed independent transmission projects will not mobilise all the capital required, and the process has been too slow and tentative,” he said.
Eskom will frustrate private power generation
Professor Anton Eberhard
In addition to a lack of funding, the strategy will result in a conflict of interest with Eskom as the dominant generator and owner of the grid, to which competitors need access.
“Eskom says it will be subject to the National Energy Regulator of South Africa’s regulation and will carry out the TSO’s Transmission Development Plan,” Eberhard said.
“But its track record shows that it has woefully underperformed. Two years ago, it built a measly 73 km of new transmission lines when the plan called for 1,400 km per year.”
He added that independent power producers would attest to myriad obstacles they faced from Eskom in gaining adequate and timely access to the grid.
“The TSO needs to be freed from Eskom’s financial contagion so that it can raise the capital needed for new investment.”
Eberhard said that there were also apparent conflicts of interest currently with the System Operator and Market Operator within the NTCSA, which is owned by Eskom Holdings.
“We see this in practice, for example, with Eskom wanting to approve the Market Code before it goes to Nersa for approval,” he said.
“The dominant generator should not have any privileged position in the new South African Wholesale Electricity Market.”
Ramokgopa’s conflicting
Eberhard believes that it was a “huge” mistake to transfer governance of Eskom to an electricity and energy minister when the public enterprises department was disestablished.
The minister is both responsible for competition and regulation in the sector and for protecting the power utility’s assets.
“He needs to ensure that there is adequate competition and investment in the sector,” Eberhard said. “I’m afraid the decision to allow Eskom to retain ownership of the grid severely compromises that duty.”
Eberhard is concerned that all the progress in opening the power market to private sector investment and competition will be undermined if the final step in liberating the grid is not fulfilled.
“This is the most critical step in the reforms,” he said. “That is why more than 100 countries have gone this route, including all the [other] BRICS countries — China, Russia, India and Brazil.”
“If Eskom holds on to transmission, I predict continued constraints for its competitors connecting to the grid and the return of load-shedding as insufficient new generation comes online.”
Eberhard called on the presidency to intervene to ensure that transmission assets were transferred from the NTCSA to a new independent TSO outside of Eskom.
He also disputed Eskom’s argument that lenders would not allow transmission assets and debt to be unbundled.
“This is certainly not true,” he said. “I have spoken to some of the major Eskom lenders, and they would be quite comfortable with an independent TSO with transmission assets.”