South Africa’s electricity transmission grid constraints pose challenges such as delaying projects and hampering electricity investment; however, the impact of this is fully understood by stakeholders, and therefore, interventions are under way to mitigate this, with collaboration pivotal to this process. This was indicated by speakers participating in Creamer Media’s “Investing in South Africa’s Electricity Transmission Grid” webinar on February 3.

The panel – facilitated by Brian Day, and featuring National Transmission Company South Africa (NTCSA) Energy Market Services and the International Trader GM Andrew Etzinger, Steel and Engineering Industries Federation of South Africa (Seifsa) CEO Tafadzwa Chibanguza, ACTOM CEO Mervyn Naidoo, Department of Electricity and Energy (DEE) Independent Power Producer Office (IPPO) head Precious Mmabakwena Edward, Engie South Africa renewables and batteries MD Sanjeev Mungroo and Discovery Green head Andre Nepgen – unpacked this and other considerations in relation to the transmission grid constraints facing the country.

This was the second of a two-part Energy Outlook webinar series, featuring a practical discussion on the country’s electricity transmission grid.

Mungroo explained that work to unbundle Eskom and engender a competitive electricity market aligns with international best practice, with this expected to unlock investment in infrastructure and decarbonisation. 

Etzinger pointed out that, with considerable new generation to be added to the grid over the next few years, multifaceted work will need to be undertaken, which the NTCSA, alongside relevant stakeholders, being “up to the challenge”.

He highlighted the need to bolster supply chains, focus on acquiring servitudes and expedite the procurement phase.

Naidoo indicated that there has not been sufficient investment into transmission infrastructure in the recent years, leading to grid constraints which is causing delays to some new electricity generation projects coming onstream, which could result in higher electricity tariffs in the future.

However, he highlighted that, with predictable demand coming through, there is an opportunity for the country to leverage its local manufacturing capacity, with a need to move towards a more strategic procurement programme.

He pointed out that while the country’s manufacturing sector has declined considerably over the past 20 years, it still has the expertise required for a revival, and this requires deliberate policy that is aligned with demand, to force localisation and job creation, which would ultimately drive and accelerate GDP growth.

Chibanguza agreed, adding that the capacity exists and that underutilisation is the issue, and that the focus should be on redirecting investment towards rectifying this.

The webinar also touched on the recent uncertainties that have emerged around the unbundling of State-owned utility Eskom’s grid assets, of a ‘soft’ unbundling, where the transmission assets stay inside Eskom, or a ‘full’ unbundling of the country’s transmission assets into a Transmission System Operator outside of the utility.

Etzinger posited that both approaches are feasible, and that it is a policy matter that could be resolved going forward.

Nepgen acknowledged this as a “complex” issue, highlighting that investors would gain confidence knowing the full unbundling is to be done over time as originally envisaged, even if this takes longer than anticipated.

Etzinger informed that the NTCSA’s updated Transmission Development Plan would be released later this year. Edward highlighted that this would, for the first time, be aligned closely with electricity generation planning.

Etzinger also mentioned that demand modelling of electricity demand during the day will also influence grid planning, to ensure that the integrity of the grid is protected, and that it is operable.

Edward mentioned that the IPP office will play a role in the months ahead in adjudicating Independent Transmission Project (ITP) bids, which aim to mobilise private sector investment in grid capacity. She said that if the first round of ITP bids is successfully concluded, the country will likely have more rounds, in the vein of the IPP process.