Electricity Minister Kgosientsho Ramokgopa. (Leon Sadiki/Bloomberg via Getty Images)
South African Electricity Minister Kgosientsho Ramokgopa on Sunday assured citizens that the government was working on immediate “low hanging fruit” fixes to solve the energy crisis, while planning to attract R100 billion in funding to expand generation and transmission capacity by 2025.
Updating the media on the status of the energy action plan announced by President Cyril Ramaphosa in July 2022, the minister outlined three major projects currently under development to supply an additional 2 300 megawatts to the grid, including a further 47 projects that will produce 37 gigawatts in the future.
Highlighting Eskom’s performance during July, he said baseline energy generation increased to 28 579 megawatts from 27 410 in May, while planned maintenance had increased to 3 493 megawatts from 3 120 for the period. Peak demand for energy was 30 510 in July, down from 31 135 in May.
Ramokgopa said Eskom needed a 325% increase in transmission infrastructure over the next 10 years, including 14 218 kilometres of circuit that needed to be built.
There is also a 122 669 MVA (megavolt amperes) increase in transmission infrastructure that is needed over the same period, which equates to a 600% increase compared to what was built over the past 10 years. The country currently has 160 019 MVA installed capacity.
He said the priority additional transformer programme will see 25 new projects supplying 13 gigawatts by 2030, and the expedited projects programme had identified 22 projects to produce a further 24 gigawatts by 2033. The latter projects are located in the Eastern Cape (5 875 megawatts), KwaZulu-Natal (3 000 megawatts), North West (475 megawatts), Northern Cape (5 845 megawatts) and the Western Cape (8 954 megawatts).
“This is an illustration of the deliberateness of these efforts, so we are responding to what the market says.
“There are efficiencies and optimal locations they have identified and it is important we work with the market to support this reconfiguration of the grid so that it gets to reflect renewable energy sources and makes it possible for us to realise that ambition of an energy mix that is biased towards renewables, and helps us to meet our national determined contribution and also the net zero path,” Ramokgoba said.
He said it was therefore important that the government’s energy commitments “get supported by an infrastructure layout that is biased towards those renewables”.
Ramokgopa added that “there is grid capacity in construction as I speak to you”.
“There are things I have identified as the low hanging fruit. There are several projects in execution that can give us generation connections immediately (in addition to the 13 gigawatts and 24 gigawatts future plans). There are three projects we are doing now and they will deliver, according to our computations, 2 335 megawatts [of new grid capacity], ” he said.
These projects include Aries Upington (400kV line); Juno Gromis (400kV line); Poseidon Pembroke (400kV line) as well as new transformers that are being built at Nama, Kronos and Upington.
“These are projects that are now in construction and they can unleash 2 300 megawatts of energy, that’s two stages of load-shedding,” he said.
But he added that the government was still dealing with “the conundrum of finances” for energy projects.
“The trend over the period as a result of constraints in the Eskom balance sheet before there was fiscal support, you will see every time the Eskom team from transmission led by (Segomoco) Scheepers would say ‘we need this amount of resources’ and then because of the constraints they would get something lower than that. A delta has been accumulating over some period of time. We are behind from where we want to be from a planning point of view as a result of limited financing,” he said.
He said the highlighted transmission projects would need close to R100 billion in the 2025 financial year and a further R170 billion in 2029.
“That is the scale and the proportion that is required and one of the conversations we are having is how to finance this. Clearly the Eskom balance sheet will not be sufficient. The fiscal matrix has deteriorated, so we need alternative sources of finances … that is the work we are addressing and once we have finalised those internal conversations we will share [the outcome with the media] and the market,” he said.
He said that funding was a major issue, alongside capacity. But the minister said this could be resolved if there was certainty in the market and the belief that the country could deliver. It is important the market knows where the funding comes from, he said.
“The market will build the necessary capacity, and of course we want that capacity to be located internally, so for people to make upfront capital costs to invest in capacity expansion or new capacity, the kind of investments required are significant, and therefore you need certainty about the future to justify the size of the investment you will be making in the South African economy,” he said.
He added that everything possible was being done on the transmission side to exploit opportunities from the “low hanging fruit”, in both the medium and long term.
Eskom was looking into how many gigawatts could be “unleashed” so the market could have certainty and “project sponsors can start execution, and we are able to resolve the energy crisis”, he said.