Eskom’s big grid headache

South Africa’s electricity transmission grid will have to effectively ‘flip’ around due to the rapid rise in renewable generation in parts of the country without much capacity, presenting a major headache to Eskom and its National Transmission Company. 

This was revealed by the German consultancy group vgbe energy, which the National Treasury commissioned to analyse the performance of Eskom’s coal-fired power plants and recommend how they can be improved. 

The group of German engineers with extensive experience in running coal-fired power plants spent four and a half months studying South Africa’s ailing power utility. 

Apart from touring Eskom’s coal power stations, one by one, the vgbe team also conducted a study of the company’s transmission grid and the significant changes that need to be made to it in the coming decade. 

They said the Eskom transmission grid faces several challenges, the largest one being the location of current generation facilities and the changes that will have to be made to accommodate renewable energy. 

The bulk of the generation capacity, which is currently the coal power plants, is in the northeast region, which is historically closest to the largest load centre in Gauteng and the country’s coal reserves. 

That, however, does not correspond to the best places for renewable generation in South Africa since their potential is towards the southwest part of the country in the Cape provinces. 

This is illustrated in the two figures below, detailing the current breakdown of where energy demand is greatest in South Africa, where the country’s electricity currently comes from and where the best potential is for renewable generation. 

This will require energy from renewables to be transported to the historical load centres over long distances. 

“This problem will gain importance with the decommissioning of coal power plants and the rollout of Independent Power Producer projects,” the vgbe team said. 

Eskom Transmission, along with the new National Transmission Company, are developing plans to tackle this issue. 

Effectively, the country’s grid will have to be ‘flipped’ around, with the majority of generation capacity coming from the southwest of the country to the major load centre in Gauteng. 

This will not be a cheap exercise, with Eskom’s chairperson saying it will need around R350 billion over the next 10 years to build out sufficient transmission infrastructure for this. 

Chairperson Mteto Nyati said in an interview with Reuters that Eskom cannot do this alone and will need hundreds of billions of rands from the private sector. 

“We probably need close to R350 billion over the next 10 years to build the transmission infrastructure. We do not have, from our own operations, the capacity to fund that,” he said.

The need for such a massive expansion of transmission infrastructure is due to the rapid growth of private renewable energy projects across South Africa to reduce companies’ reliance on Eskom and help end load-shedding. 

Despite Nyati outlining the need for private-sector investment, he also stressed that the government will own the assets built by the private sector. 

“Private sector participation, yes, but the asset is going to end up with the government,” he said. 

He added that the board was considering using the build, operate, and transfer models that have been used to build toll roads across the country. 

Under this model, the private sector would build the infrastructure and operate it for a set period, ranging from 5 to 20 years. Afterwards, it would be transferred to the government entity that procured it in the first place.