Private sector involvement in the development of SA’s electricity grid is fast becoming a reality with the pre-qualification process for the construction of 1,164km of transmission lines and 2,630 MVA of transformer capacity set to start in July.
The government is expected to issue the formal request for proposals at the end of November to invite bids from local and international bidders.
The grid development is necessary to unlock the country’s vast renewable energy sources, which is hampered by limited grid capacity.
Energy and electricity minister Kgosientsho Ramokgopa gazetted the ministerial determination for 400 kV transmission power lines with associated transformation infrastructure on March 28, which paves the way for the implementation of the programme.
Ramokgopa on Tuesday announced that the first phase of the Independent Transmission Programme (ITP) will consist of seven projects located in the Northern Cape, North West and Gauteng.
The procurer will be the department of energy and electricity , which will enter into agreements with contractors to build the infrastructure, operate it for a set period during which it will earn income from it, and transfer it to the National Transmission Company of SA (NTCSA) at the end of the period.
The buyer of the service will be NTCSA as much as Eskom is the buyer of electricity from independent power producers (IPPs) contracted by the department of energy through its IPP office.
The cost to the NTCSA will be passed on to the consumer in the electricity tariff as is the case with electricity Eskom buys from IPPs.
Models studied
Shaakira Karolia, an economic adviser to Ramokgopa, said lessons were taken from various other markets, including Brazil and India, to find the right model. She is confident the bids would not be too high.
Ramokgopa said the programme is aligned with the NTCSA’s Transmission Development Plan and the Integrated Resource Plan. The NTCSA will continue with grid development work and the private sector projects will be additional.
In total, the delivery rate of new transmission infrastructure must increase eightfold, implying increasing the build rate from 300km to 2,300km a year, Ramokgopa said.
His department will follow a “late-stage tender” approach, which means the land access and environmental impact assessments will be done before the projects are being handed over to the private contractors. That, he said, will reduce the uncertainties for contractors.
The seven projects are:
| Project | Line length | Capacity unlocked | Completion date |
| Arries-Aggeneys 400kW line | 2,200km | 174MW | August 29 2029 |
| Groeipunt 400/132kV | 126km | 87MW | April 28 2029 |
Kimberley Str Line 4 Boundary-Ferrum 400kV line | 265km | 500MW | September 30 2029 |
Kimberley Str Ph3: Mookodi-Hermes 400kV line | 240km | 250MW | December 30 2028 |
| Mahikeng Integration Phase 1 | 1,180km | 1,000MW | December 24 2030 |
Nama 400kV Str & Gromis 400/132kV | 117km | 811MW | February 28 2030 |
West Rand Strengthening Phase 1: Hera-Westgate 400kV line | 36km | 400MW | January 30 2029 |
Ramokgopa said the programme was a step change on the road to energy security and the transformation of the energy sector by mobilising significant funds from the private sector.
“We want private sector investment in transmission, although it is a natural monopoly, and government will retain ownership of the grid.”
According to Eskom’s Transmission Development Plan the country needs 14,000 km of new transmission lines over the next decade, which will cost about R440bn. The government does not have the money and therefore needs to partner with the private sector to ensure faster economic growth.
Ramokgopa said capital investment must be at a level of 30% of GDP. Of this, 20% must be from the private sector and this programme will go a long way towards that. The government’s commitment is to spend R1-trillion on infrastructure over the next three years.
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