Eskom needs to build 14,000 km of transmission lines over the next decade. However, South Africa simply does not have the capacity to undertake an infrastructure project of this size – even if the money can be found.
Professor at Centre for Sustainability Transitions at Stellenbosch University Professor Mark Swilling told 702 that the country will have to more than triple its current output to meet the demand for grid capacity.
Swilling said Eskom’s grid has been neglected over the past decade, resulting in grid capacity constraints.
For example, in Bid Window 5 of the government’s emergency procurement programme, 5,200 MW of generation was procured, but only 860 MW was installed due to a lack of grid capacity.
Eskom has a transmission development plan to tackle this problem, requiring hundreds of billions of rands to build infrastructure across the country.
The utility aims to build 14,000 km of transmission lines over the next decade, costing an estimated R372 billion.
However, this amount has increased substantially as the private sector has begun rolling out large-scale renewable energy projects in areas with little to no grid capacity.
The utility has said it will need an additional R100 billion in the 2025 financial year to execute its transmission development plan. This amount will increase annually to R170 billion in 2029.
Of particular concern is that the provinces with the best resources are the Cape provinces, while those with the best infrastructure are in the country’s northeast.
“What we are going to see over the next 20 years is that our grid is going to flip 180°, with the bulk of the generation capacity in the Cape provinces,” Swilling said.
To complete this flip, South Africa must build 2,300 km of transmission lines per annum. Currently, the country only builds 400 km of lines a year.
The maximum length of transmission lines built annually was 1,800 km in the 1990s.
Swilling said South Africa’s biggest challenge is not money, as the private sector is willing to invest heavily in upgrading and expanding the country’s grid.
The biggest challenge is the country’s lack of skills and manufacturing capacity and the institutional arrangements needed to blend private and public funding.
Even if the private sector invested billions of rands in upgrading the country’s grid, which it can do, South Africa will still have a capacity problem.
A major contributing factor to the country’s lack of capacity is the stop-start nature of the government’s grid expansion policy, which is scaring off investors.
This uncertainty prevents local and international manufacturers from investing in increasing local capacity.
Electricity Minister Kgosientsho Ramokgopa hosted a seminar with the JSE last week to discuss private funding of Eskom’s transmission development plan.
The private sector reiterated its commitment to helping the government address the country’s grid capacity constraints.
After the seminar, Ramokgopa will present a report to the Cabinet on how the country’s grid should be expanded and upgraded.