Ramokgopa to unveil plan on mechanism of funding expansion of the transmission grid

Ramokgopa to unveil plan on mechanism of funding expansion of the transmission grid

Minister of Electricity Kgosientsho Ramokgopa will in the next fortnight unveil a plan on the mechanism of funding the expansion of the transmission grid, which could unlock more than 2 300 megawatts of energy in the short term.

This comes as South Africa needs to expand its electricity transmission lines by more than 14 000km over the next few years to accommodate the additional generation capacity from renewables not connected to the grid in the Eastern Cape, Northern Cape and Western Cape.

The government is also ramping up investments in renewable energy with opening new Bid Windows and has now increased the limit for renewable energy projects that can qualify for the carbon offsets regime from 15MW to 30MW.

Ramokgopa said he would outline the plan for the work they had done so far on the grid expansion and accessing funding for the project, especially by the private sector.

He said Eskom had already proposed a quantum of R400 billion to expand transmission lines, while the Just Energy Transition Investment Plan (JET-IP) would make available another R200bn for the project.

“On the issue of transmission, the one thing that is throttling the ability of the country to realise new generation capacity is this thing called transmission. I’m confident that within the next two weeks I will be coming back to the country to say, this is how we are going to progress. We know where this money lies, it’s just the instruments of accessing it,” Ramokgopa said.

“There are issues around the cost of that money, whether components of it is concessional, whether components of it is grant financing. Then we know that once you have done that you have to construct the actual lines. We are looking at engineering, procurement, construction plus financing. That is what we are looking at. Then it’s the speed of procurement.

“We are not sitting with the money problem. We are sitting with the structural problem, how we are going to access that? We are at an advanced stage. I don’t want to release the information in bits and pieces. We must complete that information internally. I must say to the country we have been moving with speed.”

Ramokgopa was giving an update on the country’s implementation of the energy action plan yesterday.

He said they were yet to finalise internal discussions within the government, including discussions with the National Transmission Company of SA, which would make it possible that private sector participation be directed towards supporting the three priority corridors.

Ramokgopa also said the National Treasury had given Eskom some breathing room to carry out the essential maintenance it needed through the debt-relief programme.

Last week, Finance Minister Enoch Godongwana said load shedding would reduce, and reliability and security of supply would improve through the combination of private investment in new energy projects, rooftop solar installations and improvements in Eskom’s generation fleet.

Ramokgopa said they had placed part of that fiscal support to ensure that South Africa invested aggressively on the maintenance side, saying there had been some degree of relief on the demand side in the period of December 2023 to January 2024.

This was a period in which the highest level of planned maintenance was performed, reaching an average of 18% of the generation capacity, when electricity demand was low.

“If you were to take December of 2022 to February of 2023 and then you take the period of December 2023 to February 2024, the period of the year that was, we have experienced load shedding of about 1 800 hours,” he said.

“When you see the period a year later we have had about 1 200 hours of load shedding. Essentially, we have been able to reduce the hours of load shedding by about 600 hours. We are going in the right direction.”

“The reduction in the intensity and frequency of load shedding, as well as the positive Energy Availability Factor trajectory, are the real signs that there is some improvement in the performance of the generation fleet. The focus remains on sustaining this trajectory.”

Ramokgopa ended by saying that while maintenance of power stations had been ramped up and load-shedding intensity had slowed slightly, there will be setbacks like that which occurred over the past few weeks which plunged the country into Stage 4 and 6 load shedding.

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