Eskom spending R7 billion on massive grid upgrades

A panel of five transformer suppliers appointed by Eskom will compete for upcoming transformer contracts valued at roughly R7 billion over four years.

The power utility says the contracts aim to unlock the grid and provide access to reliable electricity transmission across South Africa.

“Over the next ten years, it is envisaged 101 large-scale and various other sizes of transformers will be required for the infrastructure build rollout,” it says.

Eskom’s managing director for transmission, Segomoco Scheppers, said the project aims to connect 53GW of new generation capacity over the next ten years.

“To achieve this, innovative project delivery models and partnerships are being explored and implemented to drive accelerated delivery of the Transmission Development Plan (TDP), including a priority programme for strategic projects,” said Scheppers.

The five transformer suppliers were selected through an open tender enquiry, published by the National Transmission Company of South Africa (NTCSA) in mid-March 2023.

They were selected to manufacture transformers and supplement the limited local supply capacity. Eskom noted that most of them are international companies with a local footprint.

According to the current schedule, the first batch of 26 large-scale transformers must be delivered between 12 and 36 months after the order is placed to meet urgent requirements to increase transmission capacity.

Moreover, the NTCSA has developed a framework agreement to procure 101 large-scale and other transformers from these suppliers to address large-scale demand up to the end of the 2028 financial year.

“The suppliers will compete for various tenders over the coming years and the first batch of 26 power transformers has been issued to the suppliers and is expected to be awarded by July 2024,” Eskom said.

Its goal is to facilitate the addition of roughly 28GW to the national grid by the end of the 2028 financial year.

“The procurement will enable the NTCSA to meet its transformer needs across the country,” Eskom added.

It said further tenders will be issued to encourage the local manufacture of transformers.

The transformer contract includes 34 transformers for two priority programmes to expand South Africa’s transmission infrastructure.

The first will see 25 projects at existing substations provide additional transformers to unlock a further 13GW of transmission grid capacity.

“Secondly, 22 expedited transmission projects will unlock 24,000MW of grid connection capacity,” Eskom added.

Altogether, the NTCSA is working on 47 projects with the potential to add 37GW of grid connection capacity by 2033.

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Eskom spending R7 billion on massive grid upgrades