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Plans for acceleration of Eskom’s transmission expansion falling into place – Scheppers

7th June 2024

By: Irma Venter

Creamer Media Senior Deputy Editor

     

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Eskom Transmission CEO Segomoco Scheppers says he believes the “pieces are falling into place” that will allow the power utility to “ramp up and move faster” in expanding the country’s constrained power grid.

Grid expansion will enable Eskom and independent power producers to bring much-needed new generation capacity online.

Eskom’s Transmission Development Plan (TDP), issued in October 2022, comprises more than 300 projects to expand the grid. It focuses on the need for the extensive expansion of transformer capacity at substations, as well as the construction of 14 000 km of new transmission lines in the next ten years.

Speaking at Enlit Afria 2024, held in Cape Town in May, Scheppers said that Eskom had, however, identified 47 quick-win projects that would allow it to connect roughly 37 GW of new generation capacity.

A significant number of these – 25 – revolved around strengthening existing substations by bringing on board new transformers.

“That programme will allow us to connect 13 000 MW of new generation,” said Scheppers.

The balance of these expedited projects – 22 – comprised a mix of line and substation work that would allow Eskom to connect 34 000 MW of new generation capacity.

“When you look at the development of these projects, we talk about a project lifecycle model, where you conceptualise the project, and the definition phase, where you deal with the designs and the environmental approvals, and out of that you reach [the] execution phase, when you make the final investment decision,” noted Scheppers.

“Compared with financial year 2023, when there were five projects in the definition phase, in the last financial year, that number jumped to 22 – just to put emphasis that we are driving to develop these projects to get approval and to move into execution.”

“In terms of execution and actual construction and procurement . . . in financial year 2023 there were zero projects that went into that process from this programme,” said Scheppers. “But, in the last financial year, 11 projects have gone through that programme.”

Scheppers added that 14 firms had been appointed to help Eskom with the “upfront work in terms of project preparation to supplement our own skills”.

He also emphasised that it was critical for Eskom to have access to “certain supplies and commodities, specifically transformers”.

“We have the approvals in place to put a framework agreement in place. Of the seven or so major suppliers, two have already signed contracts, and we expect the balance to be concluded this year.

“So, access to these transformers will be readily available going forward, which will help us speed up implementation.”

In terms of transmission line construction, Scheppers said Eskom had adopted an engineering, procurement and construction model, which differed from its previous approach.

“As for the matter of securing servitude, the right to construct and traverse private property and government land has been a huge challenge for the longest time,” said Scheppers.

“In this regard, we have successfully worked with the Department of Public Enterprises and the Department of Public Works and Infrastructure to expropriate land, at market- related compensation, with exception, and where required.”

Scheppers also noted that the multibillion- rand debt solution offered to Eskom, in which government had taken on R254-billion of the utility’s debt over the medium term, had allowed the Transmission business to gain access to the necessary capital to invest in infrastructure.

“But, clearly, as we move towards being a separate company, we would need to work with the regulator to ensure we secure the revenue stream that fundamentally underpins all the investment that needs to be made.”

The unbundling of Eskom into three entities will see the formation of the National Transmission Company South Africa (NTCSA) as a wholly owned Eskom Holdings subsidiary.

The NTCSA is scheduled to be operationalised in July.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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