Question NW3324 to the Minister in The Presidency for Electricity
07 November 2023 - NW3324
Cachalia, Mr G K to ask the Minister in The Presidency for Electricity
(1)With generation capacity most likely to remain a problem for Eskom in the foreseeable future, and notwithstanding that independent power producers are ready to fill the gap with renewable energy, what (a) are the reasons that private sector funding for transmission development cannot coincide with private sector supply of energy generation and (b) amount of the generation supply gap will be filled by power generated from renewables; (2) whether the development of new transmission infrastructure with private sector financing can occur in tandem with increased supply to the grid from renewables; if not, what is the position in this regard; if so, (a) when and (b) at what cost?
Reply:
1. (a) It is estimated that more than R390 billion will be required over the next decade to meet the demand for grid capacity, largely due to the increase in generation capacity through renewable energy projects and insufficient grid capacity following the various Bid Windows.
Eskom’s current financial position places significant limitations on its ability to attract sufficient capital towards expanding the transmission grid, with the delivery of transmission infrastructure taking, on average, between 7 to 10 years. It is estimated this delivery rate needs to be scaled-up by eight times to connect the energy generation required for energy security by 2030.
It is anticipated that the transmission gridbuild rate needs to increase from 300km to 2300km per year with a greater rate of investment and delivery required through to 2050.
The Ministry in the Presidency for Electricity co-hosted a Transmission Financing Seminar with the Johannesburg Stock Exchange and is currently finalising a cabinet submission on transmission financing pathways aimed at fast-tracking transmission infrastructure investments to support the anticipated growth in generation capacity and secure long-term energy security.
1 (b) The generation supply gap will be addressed through a combination of base-load and renewable technologies, acting in concert to close the demand/supply deficit whilst maintaining frequency control in the management of the National grid. Closing South Africa’s supply gap will, therefore, require a balance between these technologies and not a choice between one or the other. The Eskom Winter 2023 demand analysis projected a maximum demand of 34 000 MW, and supply for the period June 2023 to October 2023 averaged at around 28 400 MW. This suggests a supply deficit (based on peak demand) of around 6000 MW. In the medium term, accounting for growth based on an industrial-intensive path will increase the demand for baseload supply to guarantee energy security.
2 (a) Refer to 1(a) above.
2 (b) REfer to 1(a) above.