The portion of electricity tariffs currently allocated for the transmission function is too small to justify the private investment that is envisaged to supplement Eskom’s grid expansion.
As matters stand, the grid has been saturated in the Eastern, Western and Northern Cape, where renewable energy resources are best, and Eskom has resorted to curtailment to squeeze every available bit of capacity out of the grid in those provinces.“If we don’t expand the grid, it would be detrimental especially to the development of more wind generation, because the wind resources are very area-specific,” says Meridian’s Dr Grové Steyn.
He indicated that government would establish an office like the Independent Power Producers office, which does the procurement of generation capacity from independent power producers, and indicated that a ‘build, operate and transfer’ model would be followed for private investment in transmission lines.
For the state-backed IPT, the report suggests a ‘build, own, operate and transfer’ model, where government appoints companies through procurement auctions to finance, construct and operate specific lines for a period of 20-30 years. During this period, the company must maintain the line to a specified standard and receive a fixed return. At the end of the period, the line is transferred to the utility.
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