Electricity Minister Dr Kgosientsho Ramokgopa confirmed that the National Energy Crisis Committee (Necom) is considering a public–private partnership model to accelerate the building of the R210-billion-worth of grid infrastructure required to connect new generators to the grid, especially in provinces with potent wind and solar resources.

Speaking during his weekly briefing on the implementation of the Energy Action Plan on Sunday, Ramokgopa stressed that there was no intention of relinquishing State ownership of the grid, and that any arrangements would, thus, need to align with that condition.

“[Our] modelling suggests that we'll need anything in the order of magnitude of about R210-billion [to expand and strengthen the grid], and given the balance sheet constraints of Eskom and also the fact that they are not allowed to go out and borrow, we need to think creatively on how we can tap into the liquidity that's sitting in the private sector to help to roll out the grid at an accelerated pace.”

He said that Necom had not yet finalised its deliberations on the possible model but indicated that it was likely to take on the characteristics of a build-operate-and-transfer approach.

“We have not really concluded on what exactly that model is but it's not far away from build, operate and transfer in the same manner that we're building national roads . . . where through the South African National Roads Agency Limited ownership resides with the State, but you are concessioning them.”

Responsibility for the grid is in the process of being transferred to the National Transmission Company South Africa (NTC), which is being established as a separate business initially under the control of Eskom Holdings.

Ramokgopa said that the National Energy Regulator of South Africa was currently in the process of adjudicating an application to have the necessary licences transferred to the NTC.

Necom secretariat head Rudi Dicks indicated that it was possible that both the transfer of the licences to NTC and the establishment of the entity’s independent board could be finalised by the end of July, while Eskom has stated separately that the NTC should be fully operational by year-end.

Dicks also stressed that Eskom was moving ahead with initiatives in the short term to strengthen the grid under the existing framework, whereby the utility was fully responsible for the design, procurement, building and operation of the transmission line and substation assets.

He reported that the transmission business was preparing investments across 25 transformer sites that could help unlock some 12 GW of new capacity.

In addition, the division announced recently that it intended to rely more heavily on the engineer, procure and construct, or EPC, contracting model in a bid to accelerate the pace at which transmission infrastructure is built.

MD Segomoco Scheppers reported that South Africa needed to add more than 1 500 km of new transmission lines yearly between now and 2032 to ensure that the infrastructure was in place to facilitate the addition of more than 50 GW of new generation capacity, mostly in the form of variable renewables.

Scheppers revealed that the division was currently only adding 300 km of new power lines yearly, a pace that was insufficient to ensure that 14 000 km of new lines were installed over the ten-year horizon from 2022 to 2032.

In addition, more than 122 600 MVA-worth of transformation capacity would have to be added, representing 77% of Eskom’s current installed base of just over 160 000 MVA. In the prior ten-year period only 19 060 MVA was introduced.

Ramokgopa also announced that Eskom had finalised Interim Grid Capacity Allocation Rules, under which new grid queuing rules would be introduced to ensure shovel-ready projects received preference when scarce grid capacity was being allocated to projects.

Eskom has indicated that the new rules will facilitate a shift from the ‘first come, first served’ framework that has hitherto prevailed, to one based on ‘first ready, first served’.