The UK has approved £330 000 in funding to facilitate a study by the Energy Council of South Africa into the reforms still needed to implement a wholesale electricity market in South Africa.

The funding was announced during a visit to Cape Town by UK Special Representative for Climate, Rachel Kyte.

The study will be conducted by a consultancy and includes: a ten-year tariff and scenario modelling; benchmarks from other countries, such as Brazil; a clarification of the financial, regulatory and institutional capacity risks; an identification of the legal gaps that persist; and an assessment of the financial instruments needed to support the market.  

Kyte indicated that the support to the Energy Council of South Africa was a continuation of the work that had been advanced through South Africa’s National Energy Crisis Committee on the reforms needed for market liberalisation and transmission expansion.

“As part of the Just Energy Transition Partnership (JETP), 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,” she said in a statement issued by the British High Commission.

“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,”  the statement added.

Kyte also highlighted the UK’s continued support for South Africa’s JETP. This, as America’s withdrawal from the JETP was confirmed by the South African government.

The Presidency said it had been formally informed that the US had withdrawn from the JETP, to which it had initially pledged more than $1.5-billion of grant and commercial funding.

The withdrawal was communicated on February 28 by the US Embassy, citing executive orders issued by President Donald Trump on January 10 and February 7.

With America’s withdrawal, pledges to South Africa have been reduced from $13.8-billion to $12.8-billion.