Eskom has to build a 'record' amount of transmission lines to keep lights on

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Eskom CEO André de Ruyter.
Eskom CEO André de Ruyter.
Deon Raath
  • There is not enough grid capacity to connect new energy generators in the coming years.  
  • André De Ruyter says that Eskom has to build a record amount of transmission lines over the next 10 years to keep up with electricity demand.
  • The power utility is experimenting with micro-grids and other solutions to bring power to remote locations.

Eskom is prioritising investment in grid capacity to meet growing electricity demand, according to CEO André De Ruyter.

De Ruyter delivered a virtual keynote address at the Africa Energy Indaba conference on Wednesday. He spoke to the challenges of accelerating grid access, without which generation capacity will have no value.

According to the Integrated Resources Plan of 2019, about 30GW of new generation capacity - most of which will consist of renewables - must be added by 2030. But there is not sufficient grid capacity to connect these new generators.

Fin24 previously reported that the Northern Cape is running out of transmission capacity. This deterred some project developers from submitting renewable energy bids in the province.

Most recently, Cape Town Mayor Geordin Hill-Lewis said that a new procurement programme for renewable energy had been limited to 300MW, as this is what the grid capacity can handle at this stage.

"Grid access is an important determinant of where new generation capacity will be built," De Ruyter said.

Eskom's projections show that future energy generation will grow in the southwestern parts of the country. Grid capacity must be expanded to enable export of power from areas like the Western Cape, Northern Cape and Eastern Cape, which are optimal for solar and wind generation.

Upgrading transmission infrastructure - which includes transmission lines and substations - is estimated to cost R180 billion between 2022 and 2031.

Nearly 2 600 km of transmission lines must be built by the 2026 financial year:

That is 73% more than constructed in previous five years. What that means is, Eskom every year will have to build a record amount it has ever built in its history and must do so consecutively for about 10 years.

About 5 800 km of transmission infrastructure must be built by the 2031 financial year.

According to Eskom, transmission infrastructure takes eight to 10 years to complete.

De Ruyter said that the task at hand is challenging in terms of contract capacity and execution. But he is hopeful that if this rollout of transmission infrastructure is done right - it will enable security of supply and help low-cost renewables to get connected to the grid.

"If accompanied by appropriate industrial policy, it will lead to job creation and local industry stimulation," De Ruyter added.

He warned, however, that trade policy has to ensure that local procurement is cost-competitive with global market prices. Expensive local procurement costs will ultimately be carried in the transmission tariff.

"… Local procurement is supported, but it must be competitive for us to have the lowest possible transmission tariff," he added. 

Another challenge includes access to capital - but De Ruyter is optimistic that the Eskom allocation from the $8.5-billion COP26 deal will support the expansion of the grid. 

He also noted that there had been delays in servitude acquisitions - these are rights Eskom acquires to transmit power over immovable property or land. De Ruyter said that some people were exploiting the situation to make gains. "There are a number of fairly cynical individuals which have started to position themselves to extract value from servitudes," he said. 

De Ruyter added that the value of servitudes had been highly inflated, which delays acquisition. "We need to find a way to enable us to build new lines over agricultural land, in a way does not inconvenience the land owner and does not unduly enrich the landowner," he said.

He also said there is limited capability and capacity in the country related to engineering, suppliers and construction. 

Rolling out infrastructure will require outside-the-box thinking. It is not possible to build transmission lines to every part of the country.

However, people in outlying areas cannot be denied the benefits of electricity, he said, adding that it is important to find a balance between solutions like own-generation, micro-grids, and the national grid and choose the most cost-effective rollout for a particular market. 

De Ruyter added that there is scope for including local communities in finding solutions for transmission infrastructure. For example, local communities can be involved in manufacturing off-grid solutions.

Eskom has developed an off-grid solution. At its Komati power station site in Mpumalanga, the power utility set up a manufacturing facility for a containerised micro-grid. It consists of solar panels mounted on a repurposed shipping container.

Inside the container, there is an inverter and batteries for storing generated energy. It is unique in that the micro-grid and all its components can be transported by truck to remote areas where electricity is needed for use by schools, clinics and villages. 

Aid organisations and Development Finance Institutions have expressed interest in supporting this initiative to be rolled out across the country. De Ruyter said that it can drive manufacturing and create job opportunities in the production and assembly of the micro-grid's components. 

Eskom plans to serve as an incubator for an entrepreneurial firm that specialises in manufacturing the micro-grid. The power utility will provide technical support, but the aim is not for Eskom to start manufacturing these micro-grids.

A microgrid at Komati.
A microgrid at Komati.
Supplied Eskom

Other steps Eskom is taking to improve grid access for generators include leasing land in areas with existing transmission infrastructure to private players. Fin24 previously reported that the land is in Mpumalanga, around existing power stations.

Eskom has about 4 000 hectares it wants to lease through a competitive bidding process by the end of the year. De Ruyter said that the power utility intends to approach the market for expressions of interest in April or May.

The land leasing strategy will support the faster deployment of renewable energy projects and reduce load shedding. It also presents an alternative revenue stream for Eskom.

The land available falls within the Emalahleni Renewable Energy Development Zone, which means only basic environmental approvals are required. In some cases, valid environmental approvals exist at Eskom power stations.

There is an added advantage that the land is in the "heart of the coal belt."

"From a just energy transition perspective, it is crucial to demonstrate to those invested in the coal value chain there is a future beyond coal. What better way than to enable the construction of renewable energy, where coal-fired power stations are today," said De Ruyter.

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