South Africa’s grid is full — and Eskom isn’t doing enough to upgrade it
Eskom’s transmission grid in several provinces is full — or close to it — and the power utility is only spending a fraction of the money necessary to upgrade it.
This is according to Intellidex’s managing director for capital markets, Peter Attard Montalto, who told MyBroadband that Eskom is spending less than R1 billion of the R14.5 billion it says it needs to spend each year on upgrading the transmission grid.
MyBroadband asked Eskom for comment on its transmission grid upgrade plans, but it did not confirm how much it has been spending on transmission grid upgrades each year.
Montalto explained that South Africans would have to wait two years for independent renewable power producers to make a real dent in load-shedding.
“We see BW7 and 8 being successful assuming that [trade and industry minister Ebrahim Patel] doesn’t delay things — though he has the last few rounds with demands for local content that simply cannot be met. Both rounds will be 5GW,” said Montalto.
“This will make a serious dent into load-shedding (if combined with new battery rounds forthcoming), but only in 2026, most likely. So we are very positive on this but with very much delayed gratification.”
In December 2022, Montalto said the failure to allocate slots for 3.2GW of wind power through bid window six relates to a lack of grid capacity.
He added that South Africa desperately needs to expand its transmission grid — something that has never been driven forward despite Eskom and the private sector saying it with increasing desperation.
Peter Attard Montalto, Intellidex managing director for capital markets
As a result, the transmission grids in the Northern, Western, and Eastern Cape are full — and will remain so until at least 2027.
Eskom confirmed to MyBroadband that the transmission grid in the Northern Cape is at capacity, with the Greater Cape region as a whole being close to full.
“The Greater Cape area is close to full capacity; in particular, the Northern Cape has run out of capacity, the Eastern Cape has about 1.6 GW of capacity, excluding applications (for connection) which are currently being processed, and the Western Cape also has about 1.8 GW excluding applications,” it said.
According to a City Press report, the failure to award power projects through bid window 6 is a significant blow to investor appetite in the market as developers have injected about R100 million into the programme and are at risk of losing their investment.
While the transmission grids in Gauteng, Mpumalanga and KwaZulu-Natal still have plenty of space, they are not as attractive to IPPs.
General manager at Scatec sub-Saharan Africa Jan Fourie says solar resources in the Northern Cape are about 10% better than elsewhere in the country.
Therefore, interest in Gauteng and KwaZulu-Natal, in particular, is weak.
“The better solar resource in the Northern Cape can mean the difference between winning or losing the bid process for a private power producer,” said Fourie.
Montalto concurred but highlighted that although solar and wind generation rates are slightly worse in places like Mpumalanga, they still outstrip most other places in the world that developers look to.
Despite this, he said developers would still rather wait for access to new transmission capacity in the Northern Cape.
“Eskom has been quite transparent with where grid capacity is and isn’t available with developers and NECOM — as such BW7 and probably BW8 as well will be geographic specific, directing people to only apply to areas with capacity,” he said.
“There is, in reality, too much moaning from too many developers who want to somehow wait for optimal conditions and access from new transmission capacity (perhaps five years away) in the Northern Cape.”
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