May 20, 2024

Parliament Passes the Electricity Regulations Amendment (ERA) Bill

The Energy Council of South Africa welcomes the passing of the Electricity Regulation Amendment Bill [B23-2023](s76) on Thursday, 16 May 2024 by the Parliament of the Republic of South Africa. This follows the Bill’s concurrence by the National Council of Provinces (NCOP).

Our energy landscape is shifting rapidly. As we recover energy security and look to end load shedding, we must urgently refocus on navigating the complexities and challenges of implementing a market-led and decentralised energy sector in line with the amended ERA. This is the global norm and all industrial economies have long moved to this model, which will trigger significant investment in sector modernisation and digital capability. This reform also sets in motion a clear long term energy transition that is critical to meeting our global climate obligations and domestic climate legislation.

The Bill provides for an independent National Transmission Company that will impartially manage the transition to the competitive electricity market South Africa needs. The implementation of the new transmission company envisioned in the Bill and already legally established by Eskom, will help to facilitate and accelerate the investment, policy development and skills required to modernise the grid for a low-carbon future and energy security.

Critically, the ERA Bill unlocks the two most critical enablers of our energy transition. Firstly, an independent state-owned and run transmission network and operator that must optimally and rapidly expand grid capacity in line with the Transmission Development Plan (TDP). Secondly, an independent and efficient market operator that must ensure a bankable energy market that unlocks large scale private sector investment through energy traders and aggregators. An ambitious implementation period of 5 years has been set, but if effectively executed with efficient and independent market regulation, the Bill will enable significant levels of investment, economic growth and job creation.

South Africa is already moving rapidly towards a decentralised electricity system, with more than 5GW of installed rooftop solar PV and hundreds of large-scale utility wind and solar projects moving into construction. The enactment of the ERA Amendment Bill will help to ensure that this cheaper and cleaner generation capacity can effectively be brought online optimally, and to the benefit of all electricity consumers.

According to the CEO of the Energy Council Mr James Mackay, the ERA Bill is one of the critical pillars of the Energy Action Plan led by President Ramaphosa in partnership with business. It has been identified and backed by Business and Government as a priority reform for restoring investor confidence and unlocking historic investment into the nation’s energy system.

The Energy Council is committed to working with government and Eskom through the National Energy Crisis Committee to end the current crisis and ensure that South Africa enjoys an energy secure, low-carbon future. The Electricity Regulation Amendment Bill marks a critical step in this process, and we trust that the President will assent this Bill.

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