Latest news with #NationalTransmissionCompanyofSouthAfrica
Daily Maverick
15 hours ago
- Business
- Daily Maverick
Gridlock: The urgent imperative to increase SA's transmission capacity
South Africa is not short on ambition or potential when it comes to energy reform. The country's renewable energy market is maturing. Investment appetite is increasing and policy shifts, like the recent Electricity Regulation Act, indicate focused commitment to achieving a more competitive, sustainable and competitive energy market. However, one obstacle remains a hindrance to this momentum - transmission. Despite billions of rand committed to generation, over 20GW of renewable energy remains untapped due to a lack of grid capacity. As the country scrambles to meet rising energy demand and decarbonise its economy, transmission has emerged as the single most critical enabler of energy security and low-carbon growth. Importantly, the lack of transmission is not just a technical hurdle. It is the vital lever that is needed to unlock real energy transformation. With open access to the grid, more independent power producers (IPPs) will be able to participate and, more importantly, the increased capacity created by a robust transmission ecosystem will mean that South Africa (SA) can unleash the full potential of renewables – cutting emissions while improving reliability. The good news is that we appear to finally be on the path towards this enhanced transmission capacity. The establishment of the National Transmission Company of South Africa (NTCSA), to be spun off from Eskom, was a significant early milestone on this journey. This unbundling will enable open and transparent access to the grid for public and private generators. It will also pave the way for the trading of electricity through market platforms and wheeling arrangements, creating the foundation for a more dynamic and competitive power sector. The NTCSA coupled with the proposed Independent Transmission Projects (ITP) programme, creates a compelling case for private sector participation, not just in generation but also in grid infrastructure. However, there is still a long road ahead. The Transmission Development Plan (TDP) 2024 identifies the ambitious objective of integrating around 56GW of new generation and constructing over 14 000km of transmission lines by 2034. That is less than 10 years from now. The initial phase to 2029 targets a more realistic 5 043km of powerlines, but with only 286km expected to be completed in 2025, the gap between ambition and delivery remains immense. Also, with Eskom's financial constraints and national debt levels limiting national government's capacity to finance these builds, the success of the ITP programme will depend heavily on attracting private sector buy in, partnership and investment. Private investment in these ITP projects will require clear revenue models, predictable tariff structures and credible counterparties. The private sector needs certainty, not just around returns, but also when it comes to things like termination and non-payment recourse. South Africa could apply lessons from past public-private partnerships, like the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). A stable, predictable, and transparent regulatory environment, consistently applied, is key. Investors will need absolute certainty regarding tariff structures, off-take agreements with the NTCSA, and the long-term security of their substantial investments. The government's commitment to late-stage tendering – ensuring environmental approvals and servitudes are largely in place before bids – is a sensible move to de-risk projects. Standard Bank is actively engaged in this sector, working to structure bankable transmission models. There are multiple avenues to de-risk transmission investments, and we can leverage global lessons and precedents to achieve this. Countries like Brazil and Peru have successfully deployed BOOT (Build, Own, Operate, Transfer) models to deliver thousands of kilometres of grid infrastructure. We do not see any reason why South Africa cannot do the same. Transmission infrastructure does not have to be the bottleneck; it is an enabler of energy reform. But to do that, it needs to become a national investment priority. There are encouraging signs that this may be the case. The Request for Information (RFI) that took place between December 2024 and February 2025 gathered insights from market participants on how to accelerate the development of transmission infrastructure. Further milestones include the imminent release of the full Request for Proposal (RFP), which will signal a vital shift from talking and planning to execution, and allow government to shape the legal frameworks, procurement mechanisms and support instruments that will guide the first batch of independent transmission projects to market. This is the crucial next step in shifting SA's energy reality from crisis management to long-term and sustainable resilience. DM
Yahoo
02-06-2025
- Business
- Yahoo
Scatec wins preferred bidder status for Haru BESS, South Africa
Renewable energy company Scatec has been awarded preferred bidder status for the Haru battery energy storage system (BESS) project in South Africa. The project, which totals 123MW/492 megawatt-hours (MWh), is part of the third bid window of the Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP), led by the Department of Mineral Resources and Energy. Under a 15-year agreement, Scatec will receive payments for making the storage capacity available to the National Transmission Company of South Africa (NTCSA), which will use it to balance the grid. The estimated total capital expenditure for the project is approximately R2.2bn ($120m), with Scatec's engineering, procurement and construction (EPC) contracts accounting for roughly 80% of the cost. Scatec CEO Terje Pilskog said: 'Today's award reaffirms our standing as a leading renewable energy player in South Africa. We applaud the South African Government's commitment and dedication to the renewable energy procurement programmes. Battery energy storage will continue to play an important role in the energy transition, and we will continue to be at the forefront across our core markets.' The project financing will consist of 90% non-recourse project debt, with the remainder covered by equity from the owners. Scatec will own a 50.01% stake, Stanlib's Greenstreet and Redstreet Funds will hold 44.99% and a Community Trust will maintain a 5% share. Scatec will also provide engineering, procurement and construction (EPC), operations and maintenance (O&M) and asset management (AM) services. Scatec sub-Saharan Africa GM and EVP Alberto Gambacorta said: 'Dispatchable energy and grid infrastructure are now more important than ever, in the pathway to unlock the sustainability of South Africa's current and future energy system.' The Department of Mineral Resources and Energy anticipates commercial close by the end of the first quarter of 2026, with the project located in Free State Province. "Scatec wins preferred bidder status for Haru BESS, South Africa" was originally created and published by Energy Monitor, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Daily Maverick
08-05-2025
- Business
- Daily Maverick
From recovery to resilience – acting electricity DG Pillay charts a bold vision to 2050
In an address that signalled a significant and welcome shift in tone and substance in South Africa's energy discourse, acting Director-General at the Ministry of Energy and Electricity Subesh Pillay called for structural transformation in the country's electricity and energy planning regime. Speaking under the theme, Policy and Planning Considerations for Energy and Electricity in South Africa in the Years to 2050, acting Energy and Electricity DG Subesh Pillay opened the EE Business Intelligence webinar on Wednesday, 7 May 2025 by saying the country now stood at a strategic inflection point. 'We gather not in the shadow of crisis,' he said, 'but at a rare moment of inflection – one where signs of operational recovery offer us the space to shift our gaze beyond the immediate.' He cited Eskom's latest Winter 2025 Outlook as evidence of this shift. Notably, South Africa experienced nine months of uninterrupted power supply from July 2024 to March 2025. Unplanned generation losses dropped from more than 18GW in early 2023 to less than 13GW by April 2025, and energy availability has climbed to 61%, with a trajectory toward a target of 70%. Crucially, these gains were not driven by diesel overuse, but by structural improvements, including the return to service of a number of large Eskom generator units together with public and private sector renewable energy procurements. Pillay made it clear that the time for reactive management was over. 'We now have the opportunity, responsibility and indeed the obligation, to reposition our planning focus – not simply to avoid load shedding, but to power inclusive growth, industrial expansion and climate resilience.' Beyond technical fixes – addressing structural fragmentation Tracing the roots of South Africa's systemic energy fragility, Pillay criticised the past two decades of underinvestment, misalignment between policy and execution and governance inertia. Deferred updates to the Integrated Resource Plan (IRP), a long-stalled Integrated Energy Plan (IEP) and fragmented institutional mandates left the country overexposed to breakdowns and unprepared for decentralised energy realities. Yet, the address was not solely diagnostic. Pillay acknowledged recent progress, indicating his view that the Draft IRP 2025 now integrated industrial and spatial planning more closely, and the Gas Master Plan – said to be in an advanced stage of preparation – aimed to address the looming 'gas cliff' while fostering regional integration. Still, he warned, 'Until the IEP is finalised and the various planning instruments are nested under a common strategic umbrella, the risk of fragmentation remains.' A sector redefined – unbundling, competition and market redesign Pillay also highlighted South Africa's electricity market transformation, driven by Eskom's unbundling and the operationalisation of the National Transmission Company of South Africa (NTCSA). This, along with the National Energy Regulator of South Africa's new Grid Access Rules and the Electricity Regulation Amendment Act, signals a shift toward competitive markets. 'This is a fundamentally new planning and market environment,' he said. Drawing lessons from countries like Vietnam and Chile, he called for a 'whole-system approach' integrating generation, transmission, embedded supply and storage, with robust coordination across national, municipal and regional levels. Planning with purpose – five lenses to 2050 To shape a future-ready energy system, Pillay laid out five core planning lenses: Energy security as a developmental imperative: A resilient mix of renewables, gas, clean coal, nuclear and storage – including regional projects like the Mozambique-South Africa gas pipeline. Decarbonisation without destabilisation: Emphasising carbon capture, small modular reactors (SMRs) and green hydrogen, while sequencing coal retirements alongside industrial repurposing. A fit-for-purpose distribution system: With more than R15-billion lost annually in municipal distribution inefficiencies, he called for electricity distribution industry (EDI) restructuring and readiness for rooftop solar, microgrids and bidirectional power flows. Flexibility, technology and digitalisation: Expanding smart grids, real-time digital dispatch and Eskom's Virtual Wheeling platform, while stabilising grid performance with new technologies. Planning as an industrial lever: Tying energy to new industries – green hydrogen, battery minerals and local manufacturing – while driving socioeconomic inclusion and asserting South Africa's leadership in global forums. Institutions to match ambitions However, Pillay cautioned that robust modelling meant little without institutional delivery. He outlined three foundational governance imperatives: Policy certainty and regulatory clarity: Clear rules under the ERA Act, aligned procurement tools and synchronised planning frameworks. A capable and coordinated state: Enhanced local capacity, improved alignment among Eskom, Independent Power Producers, municipalities and regulators. Institutionalising planning: Embedding scenario analysis, social inclusion and learning processes within dynamic planning functions. Energy planning as nation building Pillay closed his address by reframing energy planning as more than a technocratic duty – it was, he asserted, 'a nation-building endeavour.' He stressed that the decisions made today would either entrench inequality or catalyse opportunity; lock in fragility or build resilience. 'As we look toward 2050,' he concluded, 'may this webinar not only interrogate models and assumptions, but also challenge institutions, expand inclusion and catalyse the leadership required to deliver the energy future that South Africa and Africa deserves.' The address sets a bold new tone for what is likely to be a highly contested yet pivotal planning period for South Africa's energy sector – one that demands not just recovery, but systemic reinvention. DM Chris Yelland is managing director, EE Business Intelligence.
