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Eskom transmission and distribution opportunities for local OEMs

By Lance Branquinho

INVESTMENT in South Africa’s power transmission and distribution network is crucial to supporting necessary economic growth and sustaining the country’s industrial base.

The Localisation Support Fund (LSF) latest research into South Africa’s electricity transmission and distribution requirements has identified several opportunities for local manufacturers. Eskom envisions 53 GW of new generation capacity being installed across South Africa by 2032, and transmitting that electricity will require a significant investment.

Increasing power generation is crucial, but proportional distribution and transmission infrastructure development must support it. Generation projects have garnered the most attention from investors and industrial users, but transmission and distribution are crucial to creating a harmonised capacity across the country’s industrial users in all regions. 

The physical engineering required to enable Eskom’s transmission and distribution targets for 2032 totals 14,218 km of line transmission infrastructure and 5,000 km of distribution. Powering the increased transmission and distribution are 170 large transmission transformers rated at 105,865 MVA, and 400 distribution scale transformers, totalling 53,000 MVA. 

LSF calculations propose a spend of between R288- and R360 billion on Eskom transmission and distribution infrastructure upgrades, during the next decade. To achieve its transmission and distribution infrastructure needs in the next five years, Eskom will spend upwards of R72 billion on components and infrastructure. This demand does not include what independent power producers would need.

The domestic metalworking and fabrication industry is resourced with skills and experience in creating transmission support structures, with a predicted 452 172 tons of steel required for Eskom’s grid expansion. Nearly all the steel tower and timber post infrastructure required for additional transmission lines can be locally sourced. 

Overhead line transmission products will account for R60-billion capital spending over the next ten years, with 45% of that value in lattice towers, worth R27-billion. Phase conductors will be R15-billion, with hardware and accessories accounting for R7,8-billion. Other components within the overhead line transmission expansion will be insulators worth R4,8-billion, optical ground wire cabling at R4,2-billion and earth wire products valued at R1,2-billion. 

Eskom’s advanced electronic monitoring sensors, signalling technology, and substation components have traditionally relied heavily on imports. Transmission substations rely on imported products and components, constituting 80% of their completed build specification. 

There are many opportunities for local power and transmission manufacturers in the substation market, like smart grid technologies, which include smart metering modules and conductors. Switchgear, which includes instrumentation, surge arrestors, and capacitors, are other prospects for local manufacturers. LSF’s research into Eskom’s substation needs for the future also identifies reclosures, voltage regulators and underground cabling as potential revenue channels. 

LSF estimates that distribution substations have more than half of their components locally sourced, at nearly 60%. Domestic class 0 and 1 transformers are present in Eskom’s distribution substations, and the incentivisation of local producers could support an export opportunity after the fulfilment of domestic grid expansion. 

Eskom’s transmission infrastructure expansion targets for the next decade are nearly a fourfold increase to what it sourced and installed in the last ten years. That increase in demand can create an immense opportunity for local manufacturers in the overhead line and substation supply chains.

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