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Understanding the implications of the Electricity Regulation Amendment Error Bill: Analysis by Rob Hutchinson

Azra Hoosen |
24 April 2024 | 13:00 CAT
2 min read

Industry experts have expressed support for the Electricity Regulations Amendment (ERA) Bill, which is intended to open South Africa’s electricity sector to increased private sector involvement. However, criticism has arisen due to the bill’s lack of crucial implementation details, potentially prolonging the already lengthy process amid ongoing load-shedding challenges.

Questions have emerged regarding the recent passage of the Electricity Regulation Amendment (ERA) Bill and its potential impact on regulatory oversight and market dynamics.

Rob Hutchinson Founder, Dear South Africa, discusses the intricacies of the error bill and its implications for South Africa’s energy landscape

Hutchinson emphasized that the bill represents a comprehensive overhaul of Eskom’s distribution and transmission services as part of the broader restructuring of the energy sector. It fundamentally transforms the functioning of the energy industry, allowing independent players to enter the market and fostering competition, essential for breaking Eskom’s monopoly.

“It allows producers of electricity to come in and set prices, but it also still caters to a set tariff regulated by the National Energy Regulator of South Africa (NERSA) and takes away a lot of power from the minister,” he said.

According to Hutchinson, Previously, individuals interested in becoming energy producers faced a lot of “red tape” and lengthy approval processes. However, the approval time has now been halved, significantly streamlining the process. This has made it considerably easier for prospective producers to enter the market.

He views the bill as largely positive overall, albeit acknowledging that there are areas that need improvement and further optimization.

“The previous tariff structure was difficult to understand. There were approximately 900 different tariff structures, but now they will be reduced to just a few across the board, simplifying the tariff structure role,” he said.

Regarding consumers, Hutchinson does not anticipate an immediate reduction in load-shedding. However, in the long term, he believes it will contribute to bolstering the power supply to the grid and potentially lowering electricity costs.

“The National Energy Regulator of South Africa (NERSA) has been given much more power to oversee and approve licenses and monitor performance as well as set limits on certain providers and generators. And will oversee collusion-type activities. What the bill promotes is hundreds of power producers. The bill does allow for the rooftop-solar environment as well,” he said.

LISTEN to the full interview with Ml Junaid Kharsany and Rob Hutchinson Founder, Dear South Africa, here.


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