SA Govt Seeks Private Investment For Power Lines

Minister of Electricity and Energy, Dr Kgosientsho Ramokgopa, has announced that government will pursue private investment for the construction of transmission lines through the Independent Transmission Programme (ITP).

The Minister made the announcement of the new programme during a media briefing, held in Pretoria, on Tuesday.

During the briefing, Ramokgopa touted the pilot programme for the ITP which will pave the way to the construction of 1 164 kilometres (km) of new transmission lines, designed to support renewable energy projects.

“Our renewable energy assets are not fully exploited as a result of the constraints on the transmission side. The Eskom balance sheet and the sovereign balance sheet is not sufficient to carry the kind of investments that are required in this space.

“In terms of the transmission development plan…we will need modernise and expand transmission by about 14 000km and for us to be able to do this, we need about R440 billion. The State is not in a position to provide that kind of support. So, today we are introducing the independent transmission programme,” Ramokgopa said.

He said a ministerial determination has been issued to create a “dispensation that allows for private sector participation”.

“Our view is that there’s a need for us to be able to ensure that we are able to accelerate and support transmission infrastructure development. The transmission development plan does say that we need this 14 000km of new lines to be able to unlock the capacity, especially in the cape provinces.

“That is where we have the most efficient and reliable energy assets in the form of solar and wind, but we have exhausted all of the transmission that allows us to evacuate the electrons so that the economy can benefit from those assets,” the Minister said.

Ramokgopa added that the procurement of transmission will be done in the most cost-effective way, while regulations will be issued this Thursday.

“The Ministry is the one mandated to procure and then the NTCSA [National Transmission Company of South Africa] is the party that buys that. We are going to ensure that we procure the most cost-effective and tendering procedures that are fair, competitive and equitable.

“The requirement for the ITP pilot has to be consistent with transmission development plan and it must also support the IRP [Integrated Resource Plan]. It must [also] be commercially viable,” Ramokgopa said.

It is envisioned that with the new transmission lines, at least 3000 megawatts (MW) of energy will be added to the grid.

“The new generation capacity that we are going to unlock as a result of this intervention is 3 222 MW. It is about 63% of the total capacity of Medupi and Kusile [power stations]. We are moving in the right direction.

“For the South African economy to grow, we need to unshackle the issues of the structural constraints, which is electricity and the inefficiencies in the logistics side. The second is greater investment by the private sector. Electricity gives us a pristine opportunity to transform the economy [and] grow the economy,” he said.

A Request for Qualification will be issued in July while a Request for Proposals will be issued in November. – SAnews.gov.za