During her trip to Cape Town this week Rachel Kyte, UK Special Representative for Climate, announced support to the Energy Council of South Africa to continue engagement and analysis work through NECOM on the critical reform areas of Market liberalisation and Transmission expansion. 

The UK welcomes the recent State of the Nation Address (SONA) by President Ramaphosa emphasising the importance of South Africa’s reform agenda as well as the important role of the Energy Action Plan and collective execution through NECOM by all stakeholders. 

Wide participation of the private sector in renewable energy can displace coal at a lower cost and at the pace needed to meet business and consumer demand for green energy and energy security. As part of the Just Energy Transition Partnership, the UK is supporting South Africa to speed up the liberalisation of the energy sector, achieve emissions reductions and provide the energy needed to grow South Africa’s economy and provide jobs. Part of the UK’s investment pledge has been to provide Africa GreenCo and Etana with guaranteed facilities for their energy trading. This energy trading is the first step towards a broader wholesale market.  

Energy Council of South Africa 

With UK funding of over £330,000, the Energy Council is engaging consultants to analyse and inform the next stages of the implementation of South Africa’s Wholesale Electricity Market through:  

• 10-year tariff and scenario modelling     

• use of benchmarks from other countries e.g. Brazil 

• clarifying risks such as financial, regulatory and institutional capacity   

• identifying legal gaps 

• looking at the financial instruments needed to support the market  

This follows an initial project funded by UK International Development for the Energy Council to develop the Energy Transition Roadmap, which set out a critical path for addressing system-wide constraints and explored integrated solutions for an effective energy transition.  

It is hoped this next phase of work will support the National Energy Crisis Committee (NECOM), the National Transmission Company of South Africa, Eskom, traders, buyers and other key players in the evolving energy market.