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Eskom's Division: Implications for South Africa's Energy Supply Procurement

Eskom Electricity Grid in the night sky
“It is well accepted that the majority of future energy investment will come from the private sector" Image: Adobe Stock Photography.

Eskom, once the cornerstone of South Africa's energy landscape, is undergoing

transformative shift that promises to reshape the country's energy sector.

A New Era

The decision to unbundle Eskom and establish three distinct entities – Generation, Distribution, and Transmission – marks a significant milestone in the nation's journey towards modernising its energy infrastructure.

The recent appointment of directors to the National Transmission Company of South Africa (NTCSA) board heralds the beginning of a new era, where the once-monolithic utility will operate as separate entities, each focusing on specific facets of energy provision.

The Transmission entity is at the forefront of this restructuring, which has been granted its license from the National Energy Regulator of South Africa (NERSA). Under the proposed structure, Transmission, alongside Generation and Distribution, will function as independent subsidiaries under a new holding company dubbed NewCo.

Future Energy Investment

The implications of this division extend far beyond administrative reshuffling. With Transmission taking the lead in Eskom's separation, the dynamics of demand for South Africa's energy supply procurement are poised for a notable shift.

“It is well accepted that the majority of future energy investment will come from the private sector, so building a national energy vision that has the buy-in of the public and private sector is critical,” says James Mackay from the Energy Council of South Africa in Engineering News.

Eskom has long grappled with its generation aspect and is highly reliant on coal, making South Africa a producer of one of the dirtiest electricity in the world. As Eskom reduces its role in the generation of electrons, businesses across the country will face new challenges.

Energy Volume

One critical consideration is energy volume. In a landscape where supply and demand factors dictate energy availability, securing adequate volume becomes paramount. Businesses that fail to secure energy volume at lower tariffs and controlled escalation rates risk facing potential shortages and exorbitant tariff hikes. 

Wheeling in 2024

In these uncertain times, you can rely on the innovative expertise of Apollo Africa. Our extensive industry experience, in-depth market knowledge and long-standing business networks make us your trusted partner in the energy landscape.

The year 2024 is expected to be a bright year for Wheeling renewable energy. Wheeling can increase your business's electricity savings, secure future supply volume, and reduce scope 2 emissions.

Contact our expert energy team for a free assessment of your company's energy needs. We value your time, your concerns and your business.

📞 (+27) 31 001 6453

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