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Home » Industry News » Power & Energy Efficiency » Eskom needs R72 billion to expand its grid by almost 3 000 km 

Eskom needs R72 billion to expand its grid by almost 3 000 km 

By Larry Claasen

Power group says it  actually needs to be expanded by 14 200 km.

POWER utility Eskom needs R72 billion to expand its grid capacity by almost 3 000 km over the next five years.

According to its 2023/32 Transmission Development Plan (TDP), it needs billions of rands to fund the construction of 2 890 km in extra-high-voltage lines and 60 transformers by the close of its 2027 financial year.

Though Eskom’s inability to generate sufficient electricity has resulted in scheduled rolling blackouts – load shedding – since 2008, the lack of capacity in its transmission grid capped the ability of Independent Power Producers (IPP) in the Western, Eastern and Northern Capes to other parts of the country.

This lack of capacity could be seen in the contribution from participants in bid window 6 in the Renewable-IPP Programme, limited to 1 000 MW, much lower than the target of 2 600 MW, for the 2022/23 period in its latest annual report.

According to the TDP, Eskom wants to expand the network from the cape to the load centres in Gauteng, Mpumalanga and KwaZulu-Natal.

This would see it:

  •       Require R50,8 billion to increase  generation capacity by about 53 GW in the next 10 years;
  •       Completing the integration of the Medupi and Kusile Power Stations, as well as the Bid Window 4 and 5 IPPs, resolving network reliability constraints;

It will also spend R21,4 billion on:

  •       refurbishments that address the life extension of existing assets to ensure network sustainability;
  •       production equipment;
  •       refurbishment of ageing telecommunications infrastructure; and
  •       strategic spares for emergency works.

In the TDP, Eskom admits that it actually needs 14 200 km of extra-high-voltage lines and 170 transformers by 2032. Given the “uncertainty in the longer-term”, it decided to focus on implementing projects in the next five years, which it “considered extremely critical from a security of supply perspective.”

The group acknowledged that its resources were constrained when it came to funding this expansion – it has a long-term debt of R368 billion.

“Eskom’s liquidity position, as well as the National Energy Regulator of South Africa’s (NERSA) decision on Eskom’s future tariff determination, will have an impact on the execution of the TDP,” it noted in the TDP.

It said given the financial constraints; it would seriously have to consider cutting its cloth to suit its purse.

“In the event of capital expenditure restrictions due to any of the above, the plan will have to be revised to fit in with the available budget by reprioritising projects.”

“This will be done in a way that minimises the impact on customers and the national economy due to any delays arising from a shortage of funding or any delays in obtaining environmental authorisations, servitude acquisitions, and other statutory approvals.”

Eskom is going through a restructuring, which would see its generation, distribution and transmission divisions split up into three independent companies.

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