Home South African Eskom plans R170 billion spend in next ten years on capacity expansion

Eskom plans R170 billion spend in next ten years on capacity expansion

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Eskom has revealed an ambitious plan which will see it invest more than R170 billion over the next decade in new capacity expansion projects for transmission of electricity.

Eskom has revealed an ambitious plan which will see it invest more than R170 billion over the next decade in new capacity expansion projects for transmission of electricity. Photo: Nadine Hutton /Bloomberg.

ESKOM has revealed an ambitious plan which will see it invest more than R170 billion over the next decade in new capacity expansion projects for transmission of electricity.

The struggling power utility yesterday shared its transmission development plan for the period 2022 to 2031 with various stakeholders as part of its licence requirements issued by the energy regulator.

The economy has been dealt a blow by Eskom’s crippling power blackouts since 2007 due to breakdowns at its ageing, coal-fired power plants, and the maintenance programme currently under way. The power utility has also had its infrastructure damaged due to vandalism, theft and tampering.

Group executive for transmission Segomoco Scheppers said the organisation continued to prioritise investments in the transmission grid as it understood the critical role it played in enabling economic recovery efforts.

Scheppers said the total Eskom transmission capital plan amounted to R178bn over the next 10 years. “Of this amount, R144bn is required for new capacity expansion projects to meet the reliability requirements, connection of new generation capacity and loads, as well as to acquire servitudes,” Scheppers said.

“A further R34bn is required for refurbishments to the existing asset base and procurement of production equipment, as well as strategic spares.”

During this planning period, Eskom reiterated that 30 000 megawatt (MW) of new generation capacity was expected, mainly from renewable energy sources in areas with limited network infrastructure.

The proposed energy mix comprises coal, gas, renewables and hydro, with renewables (solar and wind) envisaged to comprise just over 20000MW.

Eskom said it planned to increase the transmission infrastructure by approximately 8 400km of extra-high-voltage lines and 119 transformers to bring on board 58 970 MVA of transformer capacity over the next 10 years.

Scheppers said major expansion of the transmission network was critical for the connection of utility-scale renewable generation projects, mainly wind and solar, in line with the policy direction in the integrated resource plan of 2019 (IRP2019). But energy economist Lungile Mashele said the 30 000MW of additional capacity by 2030 as per the IRP2019 was “aspirational at best”.

“The biggest challenge facing these proposed interventions, especially the risk mitigation independent power producers programme (RMIPPP) will be the mounting legal challenges,” Mashele said. “The RMIPPP has missed two deadlines to reach financial close; it is unknown when and if financial close will happen. It is expected that coal and gas will also meet legal challenges.”

Mashele also raised doubts about Eskom’s generation capacity, saying that demand had hardly exceeded 30 000MW in spite of Eskom stating in its annual report that it had an installed capacity in excess of 45 000MW.

“Eskom is still unable to ensure security of supply despite the completion of Medupi, Kusile, Ingula and the purchase of over 6000MW of renewables,” Mashele said. “Eskom has problems in their generation fleet, problems they don’t know how to fix. In addition to operational problems they now have to deal with sporadic fires.

“In the previous financial year Eskom had 47 days of load shedding, for the six months ended 30 September they have already had 32 days of load shedding.

“Eskom is well on track to exceeding their previous record of worst load shedding on record,” he said.

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