Latest news with #IndependentTransmissionProjects
Daily Maverick
17-06-2025
- Business
- Daily Maverick
The R440bn private transmission gamble that could finally end load shedding
Government fast-tracks private sector participation in grid infrastructure while the national transmission company prepares for a competitive electricity market by April 2026. South Africa's electricity salvation is called the Independent Transmission Projects (ITP) Programme – a joint venture between Kgosientsho Ramokgopa's Department of Electricity and Energy and Enoch Godongwana's National Treasury – and it's racing the clock to unlock billions in private investment and build the 14,000km of new transmission lines needed to connect renewable energy projects and end the country's electricity crisis. Speaking to the parliamentary committee on electricity and energy last week, Minister of Electricity and Energy Ramokgopa painted a picture of a country on the cusp of an energy revolution, but one that required unprecedented national rewiring coordination between government, the private sector and state-owned entities to succeed. Ramokgopa knows the stakes. It was his Integrated Resource Plan that estimated a desperate need of more than 14,000km of new transmission lines and 170 transformers over the next decade – requiring a minimum of the N1 road length from Joburg to Cape Town's worth of new lines annually – South Africa's current grid expansion pace is 'wholly inadequate', according to government briefings. Private sector rush The appetite for private sector involvement is clear. Between December 2024 and February 2025, the government conducted a request for information that received more than 130 formal responses from local and international developers, financiers, operators and equipment manufacturers. More than 44% of local participants indicated they intended to partner with international entities, suggesting the scale of investment required exceeds domestic capacity alone. The feedback was instructive: the industry reported a need for stable regulatory frameworks and a programmatic roll-out for pipeline predictability, while also flagging permitting, right-of-way acquisition and supply chain constraints as key risks requiring proactive mitigation. The government listened. First came the ministerial determination, gazetted on 28 March 2025, designating the Department of Electricity and Energy as the procurer and the National Transmission Company South Africa (NTCSA) as the buyer under Transmission Services Agreements. The determination defines Phase 1 scope as 1,164km of 400kV transmission lines across the Northern Cape, North-West and Gauteng. Expropriation trump card Next came the Draft Electricity Transmission Regulations, on 3 April, with public consultation closing on 22 May. The IPP Office will run the Phase 1 procurement, with pre-qualification tenders expected by end-July and requests for proposals by November. A persistent obstacle that the NTCSA inherited from Eskom is the complexities of securing land for its transmission lines. Ramokgopa confirmed that expropriation with compensation would be used 'as a final instrument' after exhausting other engagement options. For ITP projects, the government aims for 'late-stage tender' – resolving land acquisition, environmental impact assessments and statutory authorisations before developers take over execution, de-risking projects for private investors. Some discussions have stretched over four years without resolution, but the NTCSA says it is committed to meticulously adhering to proper procedures to mitigate the risk of litigation as it navigates these challenging negotiations. The R440bn funding puzzle The Transmission Development Plan requires R440-billion over the next decade. Ramokgopa was blunt about the funding reality: 'The sovereign balance sheet cannot provide a blanket sovereign guarantee for this investment, nor are Eskom's or NTCSA's balance sheets strong enough alone.' The government's solution is a 'bespoke financing instrument' backed by a Credit Guarantee Vehicle (CGV) developed with the World Bank. The CGV will be incorporated as a private non-life insurance company in South Africa and is expected to become operational in 2026. For the first five years, R155-billion will be spent on transmission infrastructure, with R30-billion expected from third-party debt by 2028. NTCSA's board has increased its five-year budget by about R40-billion to R130-billion, with 76% allocated for network expansion. A R219-billion provision from Budget 3.0 (part of the R1.03-trillion medium-term expenditure framework) was noted for strengthening the electricity supply network, from generation to transmission and distribution. Supply chain nationalism Ramokgopa pointed to the government's intention to build local industries on the back of energy investments rather than 'exporting opportunities'. The Department of Trade, Industry and Competition is coordinating interventions to ensure local production of Class 4 transformers and steel. The progress is evident: 22 factories have been accredited for various transformer classes, while five of six identified steel tower suppliers have been certified. Eskom announced a panel of transformer suppliers in June 2024 to address demand for 101 large transformers over the next decade. Racing against time With the competitive electricity market targeted for April 2026 and the Credit Guarantee Vehicle becoming operational the same year, timelines are tight. The NTCSA is simultaneously developing market codes, managing infrastructure roll-outs and preparing for its role as market operator once the Electricity Regulation Amendment Act is passed. The South African Wholesale Electricity Market School will launch at Wits Business School to build market participant capabilities, while synchronous condensers are planned to strengthen grid stability as renewable penetration increases. That said, for the first time in years, South Africa has a comprehensive plan, committed funding mechanisms and private sector interest to transform its electricity system. Whether it can execute fast enough to meet the 2026 competitive market deadline – and finally end load shedding – remains the R440-billion question. DM
IOL News
08-06-2025
- Business
- IOL News
South Africa's Independent Transmission Projects Programme: Key progress and future plans
Wind turbines lined up at Rietkloof Wind Farm. According to the Integrated Resource Plan (IRP 2019) and Eskom's Transmission Development Plan (TDP 2024–2033), over 14 000 km of new transmission lines are required within the next decade to accommodate an additional 53 GW of generation capacity. South Africa's Department of Electricity and Energy (DEE) and National Treasury have announced significant strides in the Independent Transmission Projects (ITP) Programme, a public-private partnership aimed at revolutionising the nation's transmission infrastructure. The initiative seeks to unlock billions in investment, accelerate economic growth, and support the country's energy transition by modernizing its overstretched power grid. According to the Integrated Resource Plan (IRP 2019) and Eskom's Transmission Development Plan (TDP 2024–2033), over 14 000 km of new transmission lines are required within the next decade to accommodate an additional 53 GW of generation capacity. With the current grid expansion lagging at an inadequate pace, the government aims to construct at least 1 400 km of lines annually to ensure energy security and economic stability. "Government is acting deliberately, and decisively to partner with the private sector to assist the National Transmission Company of South Africa (NTCSA) to accelerate the rollout of the transmission infrastructure to enable economic growth and the addition of the renewable energy capacity," DEE and Treasury said in a statement on Friday. They said the government has made notable progress since the programme's inception. A global market sounding exercise conducted between December 2024 and February 2025 garnered over 130 responses from local and international developers, financiers, and manufacturers. Key findings highlighted strong interest in partnerships, with 44% of local respondents planning collaborations with global entities. Stakeholders agreed there was a need for a stable regulatory environment and a predictable project pipeline to ensure investment and supply chain readiness. "Risks identified included permitting, Right of Way, and supply chain constraints, which will be proactively mitigated through upfront government measures, drawing on global best practice," they said. On March 28, 2025, a landmark Ministerial Determination was gazetted, designating the DEE as the procurer and the NTCSA as the buyer under Transmission Services Agreements (TSAs). The determination outlined a 1 164 km project scope of 400kV transmission lines across the Northern Cape, North-West, and Gauteng, with procurement adhering to fair and competitive tendering processes. Further advancing the programme, draft Electricity Transmission Regulations were gazetted for public comment on April 3, 2025. These regulations establish transparent cost recovery mechanisms, defined regulatory approval processes, and enforceable project implementation frameworks to ensure the programme's bankability. Following the close of public consultations on May 22, 2025, the DEE is finalising the regulations for promulgation, DEE and Treasury said. Structured Procurement Timeline The Independent Power Producer (IPP) Office, leveraging its proven expertise in energy procurement, will oversee the ITP's Phase 1 tender process. A pre-qualification tender (Request for Qualification) is set for July to shortlist capable bidders, followed by a Request for Proposals by November. "These timelines provide developers with sufficient lead time for due diligence and consortium formation, ensuring a robust and credible procurement process," they said. Innovative Financing Solutions To bridge South Africa's infrastructure funding gap, the government, in collaboration with the World Bank, is developing a Credit Guarantee Vehicle (CGV). Operating as a licensed non-life insurance company, the CGV aims to mobilize private capital and support the Just Energy Transition Partnership (JETP) decarbonisation goals. "A draft Information Memorandum (formal offer via private placement of shares in the CGV) which provide granular details on how the CGV 4 of 4 will operate has been developed and will be shared with our development partners. Following the sharing of the Information Memorandum, the team will in July 2025 engage in one-on-one discussion with the identified development partners who expressed interest in participating in phase one of the CGV. It is envisaged that the CGV will become operational in 2026," the statement said. Looking ahead, the government reaffirms that a programmatic, multi-phase ITP rollout will follow the Phase 1 tender, ensuring a clear pipeline of future bid windows to: • Stimulate industrialisation, support local manufacturing, and build domestic technical capability. • Enable continuous improvement in procurement design and risk allocation. • Foster market depth, investor confidence, and price discovery. BUSINESS REPORT
IOL News
28-05-2025
- Business
- IOL News
How South Africa is leading the charge in hybrid solar energy development
Explore how South Africa is transforming its energy landscape through hybrid solar solutions, enhancing grid stability and meeting net-zero commitments in the face of climate challenges. Image: File. As the global energy sector races to meet net-zero commitments, utility-scale solar is undergoing a fundamental transformation. No longer defined by megawatt capacity alone, solar projects are now being evaluated on their ability to deliver dispatchable power, enhance grid stability, and provide critical ancillary services. Nowhere is this evolution more pronounced than in Africa, particularly South Africa, where the Just Energy Transition is accelerating the shift towards resilient, grid-integrated renewable energy. 'Across the continent, and especially in South Africa, we're seeing a strategic move away from variable-only generation,'Jaco Uys, SVP Projects Sub-Sahara Africa at Scatec said. 'What matters now is whether a project can deliver clean energy consistently on demand day or night. This means thinking beyond solar panels, to fully integrated energy systems,' Uys said. South Africa's Eskom-constrained grid has spotlighted the urgent need for firm, responsive power. As Independent Power Producers (IPPs) are increasingly permitted to co-develop transmission infrastructure under the country's new Independent Transmission Projects (ITP) framework, the focus is shifting to hybrid models that combine generation with advanced control technologies. At the forefront of this movement is Scatec's Kenhardt project, a hybrid solar-battery development in the Northern Cape. Boasting 540 MW of solar PV paired with 225 MW/1,140 MWh of battery storage, Kenhardt delivers consistent dispatchable energy under a 20-year Power Purchase Agreement with Eskom. It was recently recognised at the 2025 Solar Energy Conference in Norway for its trailblazing approach in combining renewables with storage to strengthen energy reliability. 'Kenhardt isn't just a solar project,' Nic Bailey, SVP Operational Excellence and Digitalisation at Scatec said. Bailey, alongside Uys, is representing the company at Intersolar Europe in Munich this week. 'It's a demonstration of what's possible when you pair clean generation with flexible output. We're not just injecting power into the grid—we're actively supporting it,' Bailey added. Speaking from Munich both Bailey and Uys shared further reflections on the state of the industry: 'We're not witnessing seismic shifts in solar technology,' Bailey further said. 'Instead, we're seeing incremental improvements in efficiency, equipment size, and LCOE year on year. That's a positive for IPPs like us—it allows for predictability in planning and stability in execution.' 'Amid challenges in the solar module market, the booming battery energy storage (BESS) sector is emerging as a vital growth area. It's reshaping the value chain and fuelling supplier diversification,' said Uys. 'It's clear that Scatec continues to stand out as a reliable partner,' Bailey said. 'Suppliers consistently point to our ability to move challenging projects forward in complex markets—something few others are managing as consistently.' As South Africa continues to unlock private sector participation and modernise its energy infrastructure, the lessons from Kenhardt and other grid-resilient projects are resonating far beyond its borders. Hybrid solutions represent the next chapter in the solar story—offering not just power, but progress. BUSINESS REPORT
