Eskom must invest significant capital in upgrading its transmission network and battery storage technology for renewable energy projects to come online and solve the country’s energy crisis.
This is according to the vice-president of the New Development Bank, Leslie Maasdorp, who spoke to the SABC about the Bank’s role in assisting South Africa to end load-shedding.
The New Development Bank, commonly known as the BRICS Bank, has a capital base of $50 billion to invest in projects among its member nations.
Maasdorp reiterated the Bank’s commitment to helping South Africa address its electricity shortfalls by investing in renewable generation projects.
The Bank has assisted South African state-owned enterprises, such as Eskom, with financing and Independent Power Producers through the Development Bank of Southern Africa and the Industrial Development Corporation.
Maasdorp said the Bank is currently finalising a program to raise money on the Johannesburg Stock Exchange to invest in renewable energy projects in South Africa.
“Currently, our big focus is on energy and helping the country recover from the energy crisis”, Maasdorp said.
However, he said that existing projects the bank has invested in would take some time before they contribute energy to the grid.
This is due to the need for Eskom to upgrade its grid significantly to enable renewable projects to connect to its transmission network.
The Bank has recognised that it will have to deploy capital to fund the upgrading of the grid.
“We need to put more resources into upgrading the grid”, Maasdorp said. “It is an area we hope to play a bigger role in.”
Maasdorp’s comments echo those of the general manager for Scatec in Sub-Saharan Africa, Jan Fourie.
Three of Scatec’s projects at Grootfontein in the Western Cape reached financial close at the end of June.
However, construction can only start in the first quarter of next year, with the projects only being completed and providing electricity to the grid in 2025.
This is mostly due to delays in getting grid connection approval from Eskom. The delay is not financial, planning, or construction – but rather a lack of grid capacity.
Fourie said that all the company can do now is wait for the Eskom process to run its course.
“The grid is becoming the bottleneck, especially in high-resource areas with wind and solar resources.”
He admitted that building transmission lines to large renewable projects far outside major metropolitan areas is extremely difficult as they must cross private and public land.
There is simply a lack of electricity infrastructure in these areas due to the design of Eskom’s grid and chronic underinvestment.