Page 33 - Energize September 2021 HR

VIEWS AND OPINION

Anton Eberhard: Recent regulatory reforms hundred and six countries around the world have gone this route, which also enables a fair and
have removed ministerial and National transparent platform for contracting and dispatching least cost power. What are the advantages of
Energy Regulator permissions for power keeping the Independent Transmission System and Market Operator within the Eskom group?
market access and we are likely to see a flood
of new privately funded and developed power André de Ruyter: Eventually, the Independent Transmission System and Market Operator
generation projects. The focus will now shift may operate outside of the Eskom fold, which will be a policy decision. Legal separation of
to grid constraints. You have highlighted transmission could be seen as the first step on that road. I am mindful at the moment that we
that around R180 billion needs to be spent need to contain cost. Setting up an entirely independent new entity will inevitably lead to an
on transmission and distribution. How will increase in functional cost by duplicating services currently rendered by Eskom corporate. For the
Eskom in its current form be able to raise this moment, we are therefore content to proceed with legal separation, with appropriate governance
finance? Will the new transmission subsidiary structures to ensure independence in decision-making by the Independent Transmission System
company of Eskom Holdings not still be and Market Operator, while keeping costs down. Nothing that we are doing rules out a completely
exposed to the credit ratings and financial independent entity and when the time comes, we will be ready to implement upon the instruction
contagion of the Eskom Group? You have said of our shareholder.
that sophisticated governance arrangements
can be put in place to ensure the About Professor Anton Eberhard
independence of the transmission subsidiary Anton Eberhard is a professor at the Graduate School of Business, University of Cape Town. He
company. But why stick with this option? holds the positions of Professor Emeritus and Senior Scholar at the Power Futures Lab at the
Transmission comprises only 10% of Eskom’s University of Cape Town’s Graduate School of Business.
assets. It is entirely possible to negotiate with
lenders and over the next few years move the Acknowledgement
Independent Transmission System and Market This article was first published by The Conversation and is republished here under the Creative
Operator outside Eskom, with the prospect Commons licence.
of migrating back to investment grade and
accessing competitively priced debt. One Send your comments to rogerl@nowmedia.co.za

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