The hockey-stick-curve shape of Eskom’s ten-year execution plan for delivering much-needed new transmission infrastructure continues to come under intense scrutiny from domestic industry, with warnings that the dearth of work in the early years is undermining their immediate sustainability and prospects of participating in the later ramp-up.

Eskom’s current Transmission Development Plan (TDP) outlines the need for the installation of more than 14 000 km of new high-voltage powerlines and 105 865 MVA of transformer capacity for the ten-year period to 2032.

Eskom received an exemption from the regulator not to publish a new ten-year plan for the period from 2023 to 2033, pending an update to the Integrated Resource Plan, which will provide new demand and supply assumptions.

Regardless of the changes, however, it is widely accepted that there is a need to accelerate the pace at which new grid infrastructure is deployed, with the connection of new generation projects increasingly facing transmission-related risks.

This is reflected in the current TDP, which outlines a 325% increase in powerline delivery over the ten-year horizon when compared with actual roll-out rates achieved in the prior ten years, as well as a 600% increase in transformer capacity period-on-period.

Eskom Transmission MD Segomoco Scheppers told participants in a TDP forum this week that the expansion was required to connect 53 GW of new generation capacity by 2032, mainly from variable renewables sources.

He also confirmed that Eskom had further refined the TDP implementation plan to prioritise 47 projects to open 37 GW of connection capacity, including 25 transformer projects at existing substations to unlock 13 GW in the next five years.

However, the execution plan is heavily back-end loaded with the project-delivery tempo accelerating sharply only from the 2027 financial year onwards.

For example, while 3 418 km of powerlines are projected to be installed between the current financial year and 2028, 1 742 km of that is planned for the 2028 financial year, with fewer kilometres expected to be delivered in 2024 and 2025 than the 326 km installed in the 2023 financial year.

The transformer execution schedule is similarly shaped, with only 160 MVA of the 28 850 MVA to be installed in the current financial year against 15 460 MVA in the 2028 financial year.

Eskom acknowledges that the current implementation schedule is problematic, particularly for a domestic construction industry that has been severely weakened by a combination of a sharp pullback on projects from financially distressed State-owned companies, lockdowns and violence on several construction sites.

Eskom estimates that there is currently capacity to deliver 800 km of powerlines yearly “at a stretch”; well short of the 1 400-km-a-year average outlined in the TDP and the anticipated yearly delivery peak of 2 700 km that will be required to address the slow implementation ramp-up.

It also warns of transformer supply-chain constraints, with only one single local supplier for Class 3b transformers and no local supplier for Class 4 transformers, as well as insufficient local steelmaking capacity for the execution period beyond 2027.

However, it is not overly optimistic about the prospect of “flattening the curve”, given the backlogs that developed during the period when it had insufficient financial resources to develop the pipeline and execute the projects.

Following the R254-billion debt-relief package approved earlier this year, Scheppers insisted that Eskom Transmission, which is in the process of being restructured into the National Transmission Company South Africa, had the TDP funding it requires for the coming three to four years.

He added that efforts were under way with government and other stakeholders to assess funding and delivery options for the period thereafter. However, there were no immediate plans to crowd-in private finance and execution capacity.

Instead, Eskom would seek to beef up its own capacity by awarding contracts for owner’s engineers, possibly later this month, and by relying more heavily on engineering, procurement and construction, or EPC, contractors.

A tender for powerline EPC contracts is expected to be awarded in March, followed by a substation EPC award in April.

In addition, Eskom has initiated a line contractors incubation programme, with five companies currently participating.

Nevertheless, domestic industry warns that, under the current execution framework, there could be a loss of domestic capacity in the intervening years ahead of the steep acceleration outlined for the second five years of the ten-year TDP.

Should that be the case, there could be a heavy reliance on imported skills and components if South Africa is to meet its grid development targets.

However, there are processes under way, including through the Localisation Support Fund, to map the localisation potential associated with the roll-out of new transmission and distribution infrastructure and to promote local manufacturing and value chains.