A stand-out statement in President Cyril Ramaphosa’s February 12 State of the Nation Address (SoNA) was the following: “We are restructuring Eskom and establishing a fully independent State-owned transmission entity. This entity will have ownership and control of transmission assets and be responsible for operating the electricity market. Given the importance of this restructuring for the broader reform of the electricity sector, I have established a dedicated task team under the National Energy Crisis Committee to address various issues relating to the restructuring process, including clear timeframes for its phased implementation. It will report to me within three months.”

The remarks were viewed as particularly significant mainly because they contradicted an unbundling plan announced by Electricity and Energy Minister Dr Kgosientsho Ramokgopa only a few weeks earlier and which arose from Eskom’s internal deliberations on the future of its unbundling.

The Eskom plan stated that the Transmission System Operator (TSO), the formation of which is legally required within five years of the enactment of the Electricity Regulation Amendment Act, which came into force in 2025, would be the system and market operator. However, the plan also stated that the National Transmission Company South Africa (NTCSA), which began trading as a separate subsidiary of Eskom Holdings in mid-2024, would not only retain the transmission assets, but remain a subsidiary.

The Eskom unbundling announcement was met with surprise by organised business, and even parts of government, as it was seen as deviating from the economic reform agenda being pursued under Operation Vulindlela.

Reformers view the full unbundling of the TSO as necessary for the creation of a competitive industry, while having the entity own and control the grid assets is seen as key to addressing the grid backlogs preventing the new connections needed for both security of supply and competition.

Ramaphosa underlined this point in his SoNA, stating: “We are establishing a level playing field for competition, so that we are never again exposed to the risk of relying on a single supplier to meet our energy needs.”

With the President’s three-month deadline for resolution of the matter approaching in May, it is uncertain whether the task team is making progress and will meet the deadline.

There are signs, however, that the process may not deliver a fully unbundled TSO, with the grid assets, by 2030.

The strongest signal of this is a statement by the Energy Council of South Africa that broadly supports Ramaphosa’s intentions, but argues in favour of a “phased transition” that mitigates the commercial and fiscal risks associated with Eskom’s unbundling.

More confusing is a sentence in the statement that proposes the “early establishment of a new State-owned TSO entity in law, followed by the separation of transmission assets through an independent State-owned NTCSA as a dedicated transmission owner and operator”.

How this deviates from Eskom’s initial plan is unclear, but it does seem to create room for a solution that includes no firm timeline for full unbundling.