Minister for Electricity Dr Kgosientsho Ramokgopa has assured the private sector that the government will take a leading role in financing the expansion of the transmission grid even though it needs a considerable amount from the private players.
Ramokgopa yesterday confirmed that Eskom’s transmission expansion and strengthening would require a “considerable amount of resources”.
The government would need more than R250 billion to expand the transmission grid by an additional 14 000km over the next 10 years.
Ramokgopa said he would table his report in Cabinet in October after he met with captains of industry at the JSE last week where they discussed the financing of the grid expansion during the South African Transmission Financing Seminar.
“We are looking to tap into the liquidity that is available from the private sector to allow us an opportunity to expand the grid so that we are able to accommodate the renewable energy solutions that have been rolled out in the country, and a number of them have not been connected to the grid as a result of the constraint on the transmission side,” Ramokgopa said.
“The transmission expansion and strengthening exercise will require a considerable amount of resources and we know that the Eskom balance sheet is constrained and we know that the sovereign metrics have deteriorated. So it’s important that we explore opportunities for the country to tap into the liquidity that is sitting with the private sector.”
Ramokgopa said the government was “doing everything possible” to engage the private sector on what will attract more investment in transmission.
He said they needed to start investing in grid expansion now because there were many renewable projects that have been stalled as a result of a lack of grid capacity.
“We don’t want to repeat the same mistakes that have been committed on the generation side, where we kicked the can down the road and we just thought that the private sector on its own will come into the space and resolve the issues of generation capacity constraints,” Ramokgopa said.
“What we know is that the State must be a very active participant in that space and that’s why we are doing everything possible to create those conditions. For us to create those conditions, it is necessary upfront, to have an appreciation and understanding from the private sector. What are some of those conditionalities that in their own view will make it possible for them to be able to finance.”
Ramokgopa also said Eskom would continue to carry this out on generating units.
“We will continue relentlessly with our efforts to ensure that planned maintenance gets to be executed. The intention is to make sure that everything possible is done to address the issues around the possibility of these units failing, going into the future," he said.
“Therefore, planned maintenance is something that receives our attention and we are going to be diligent in ensuring that we are able to execute planned maintenance so that we are able to derive the benefit going into the future."
“We are striving to go even below 13 000MW to ensure that we have as many megawatts available because once we reduce the unplanned capacity load factor, those megawatts get to be added to the available capacity and they are also able to defray the intensity of planned maintenance."
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