Minister of Electricity Kgosientsho Ramokgopa has insisted that the country will need almost R400 billion for grid expansion to accommodate renewable energy projects to improve energy supply.
Ramokgopa said Eskom’s balance sheet was not in a position to fund the grid expansion project.
He said the expansion of the grid will have to be ramped up compared to the current rate.
This would mean increasing it almost tenfold from the current 300km of transmission lines being built to 2,300km a year.
The energy crisis is affecting the country with Ramokgopa saying recently load shedding costs the economy R1bn per day.
Some of the major sectors, including mining have resorted to other sources of energy.
South African Reserve Bank Governor Lesetja Kganyago and National Treasury also said the economy could have grown higher than 2% last year. But the impact of load shedding led to low economic growth.
Ramokgopa, who was replying to a written parliamentary question from DA MP Ghaleb Cachalia, said they want to expand the grid to meet the demand of renewable energy projects.
“It is estimated that more than R390bn 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 seven 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 grid build rate needs to increase from 300km to 2,300km per year with a greater rate of investment and delivery required through to 2050.,” said Ramokgopa.
He added that he will soon be tabling a financing model to Cabinet for transmission lines.
This followed the summit held in Sandton with business leaders on the financing of transmission lines over the next few years.
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