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South Africa’ TDP: ZAR118 billion investments planned by 2030 [free access]

November 10, 2020

South Africa’s state-owned power utility, Eskom Holdings SOC Limited (Eskom), recently published its Transmission Development Plan (TDP), 2021–30, laying out the targets and capital expenditure needs to address the future gird network requirements of the country.


The country’s transmission infrastructure is obsolete and is in urgent need of expansion. Grid facilities are currently unable to meet the country’s growing electricity demands, provide reliable power and further integrate new sustainable energy options.


The TDP, which is updated annually, focuses on attaining grid code compliance by resolving both substation and line violations (N-1) to ensure network sustainability; expanding infrastructure to meet future demand growth; establishing the required transmission network to integrate upcoming planned generation capacity; and undertaking asset replacement to ensure reliability of supply and network optimisation.


As per the Mineral Resources and Energy’s Integrated Resource Plan (IRP) 2019, which caters to the addition of new generation capacity in the country, around 30 GW of new generation capacity (of which 50 per cent is renewable-based) will be added during the next decade. This in turn will require acceleration of transmission projects already identified in the 10-year network development plan, development of new corridors and substations, and strengthening of existing substations.


Therefore, to meet the increasing electricity demand, evacuate power from the upcoming generation capacity, and increase grid stability, the power utility has announced an investment of around ZAR118 billion under its TDP 2021–30 for the addition of around 5,650 km of transmission lines and 41,595 MVA of transformer capacity to South Africa’s grid network.


Eskom is also executing cross-border links, which will connect all the Southern African Power Pool (SAPP) member countries, with the aim of establishing a regional power market. In addition, Eskom is undertaking various off-grid initiatives to establish a reliable and secure grid network.


South Africa’s industry structure

South Africa’s electricity sector is dominated by Eskom. It operates 90 per cent of the country’s installed generation capacity and also holds a monopoly over the transmission, distribution and trade of electricity. The Department of Energy (DoE) is responsible for policymaking, while the National Energy Regulator of South Africa (NERSA) is responsible for regulating the energy sector and granting licences.


To promote private participation in generation, NERSA developed Renewable Energy Feed-In Tariffs in 2009. In 2011, the DoE replaced these with a competitive bidding process for renewable energy—Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), consisting mostly of solar and wind power generation technology. Independent power producers (IPPs) were therefore introduced into South Africa’s Electricity Supply Industry (ESI) through the highly successful REIPPPP.


Eskom’s poor financial health and restructuring

As per Eskom’s previous and current TDPs, the power utility intended to spend around ZAR10 billion on average each year for the development of the country’s transmission sector. However, over the past five to six years, the utility has only been able to spend ZAR0.8–1.2 billion each year on the expansion of the transmission sector. The power utility has been facing a deep financial crisis for years, and hence the underinvestment in the sector. Further, due to a low cash reserve margin, Eskom is now finding it challenging to undertake high-level maintenance of its ailing infrastructure.


The South African utility had accumulated a net debt of ZAR415 billion at the end of FY2019–20. To keep the power company afloat, the South African government, in July 2019, injected ZAR59 billion into Eskom to service its debt. This support is in addition to the 10-year, ZAR230 billion budget allocation the government provided earlier the same year.


The government has now proposed to unbundle the power utility to overcome the bottlenecks in the sector. In October 2019, the South African government published a roadmap to restructure Eskom into separate subsidiaries (under Eskom Holdings) aimed at improving efficiency, creating greater transparency around performance, providing greater protection against corruption and providing confidence to capital providers, resulting in greater investment comfort.


The first step under the new model is to establish a transmission entity (TE), which will act as an unbiased electricity market broker to promote capital investment within the industry, and further conduce energy efficiency and cost sustainability. Eskom is committed to establishing the TE by December 2021. Under the generation segment, a separate subsidiary will be formed for generation, comprising mainly the current power plant base, which will be separated into several feasible smaller generation units. Lastly, a separate distribution entity will also be formed, which will be authorised to buy from the TE, licenced municipal generators and embedded generation (small‐scale residential and business generators). There are speculations, however, that due to lengthy legal processes, Eskom might not be able to meet its unbundling timetable, which is scheduled to be completed by the end of 2022.


South Africa’s existing power infrastructure

As of March 2020, South Africa had an installed capacity of about 50.3 GW, which increased at a compound annual growth rate (CAGR) of only 2 per cent from 2016 to 2020. Of the total generation capacity, 90 per cent or 45.1 GW is owned by Eskom, and the remaining 10 per cent or 5.2 GW is owned by IPPs.


South Africa’s generation mix comprises 81 per cent or 40.8 GW of thermal-based capacity, while 7 per cent or 3.3 GW is hydro-based, 4 per cent (1.9 GW) is nuclear-based and the remaining 8 per cent or 4.2 GW is renewable energy-based (mainly wind and solar).


Though the majority of the existing generation capacity is thermal-based, RE-based capacity is now being gradually added to the generation mix. Majority of the renewable addtion to the country’s generation mix is through IPPs via the REIPPPP.


Figure 1: Growth in South Africa’s installed electricity capacity (MW)

Source: Eskom; Global Transmission Research


As of March 2020, Eskom’s transmission network comprised 33,027 km of high voltage transmission lines, and 153,135 MVA of transformer capacity ranging from 132 kV to 765 kV. Over the five-year period (2016–20), the line length and transformer capacity grew at a CAGR of 1 per cent and 2 per cent respectively.


Figure 2: Growth in South Africa’s transmission network

Source: Eskom; Global Transmission Research


The majority of South Africa’s high voltage network is at 400 kV and is based on alternating current (AC) technology, with the exception of the 1,032-km-long, 533 kV high voltage direct current (HVDC) monopolar line that links the Cahora Bassa hydroelectric power plant (HPP) in Mozambique to Johannesburg. South Africa’s electricity network is interconnected with the grids of Botswana, Mozambique, Namibia, Zimbabwe, Lesotho, Swaziland and Zambia.


Figure 3: Major transmission expansion projects completed over the last ten years

Source: Eskom’s TDP 2021–30; Global Transmission Research


Currently, the power utility owns about 351,023 of overhead distribution lines and 7,734 km of underground cables in South Africa. Eskom Distribution provides power to 45 per cent of the end-users in the country, including bulk supply to municipalities.


Transmission Development Plan 2021–30

The TDP provides an outline of the future power system of South Africa. Eskom’s TDP is driven by two goals—integration of new upcoming generation capacity, mainly renewable [of both Eskom and IPPs], and refurbishment of the existing aged infrastructure.


Over the next decade, South Africa’s power demand is expected to increase from 37,726 MW in 2020 to 46,175 MW in 2029, representing an average annual growth rate of 2.27 per cent. To meet this electricity demand, as per the targets given under the IRP2019, the country plans to add around 30 GW of new generation capacity by 2030. Of the total, 9.8 GW of new capacity is expected to be connected by 2025 and the remaining 15 GW of new capacity will be connected between 2026 and 2030.


Out of the 30 GW, around 51 per cent (15.7 GW) of the upcoming generation capacity will be solar- and wind-based, 26 per cent (8.1 GW) will be gas/diesel-based, another 15 per cent (4.5 GW) will be coal-based and the remaining 8 per cent (2.5 GW) will be hydro-based.


As per the TDP 2021–30, Eskom has envisaged an investment of around ZAR118 billion over the next decade for the addition of 5,650 km of transmission lines, 41,595 MVA of transformer capacity and 83 transformers at the 275 kV, 400 kV and 765 kV voltage levels. Of the total planned line length, 84 per cent or 4,741 km will be at 400 kV, 15 per cent or 838 km at 765 kV and the remaining 1 per cent at 275 kV.


Over the 10-year span (2021–30), 52 per cent of the line length (2,937-km), 64 per cent of the transformer capacity (26,585 MVA) and 63 per cent of the transformers (52 transformers) will be added to the country’s grid network during the second half of the plan (2026–30).


Some adjustments have been made to the current TDP since its last publication in 2019, which includes the re-phasing of capital investment in transmission projects to align them with the project execution timelines that are associated with servitude acquisitions and current available funding.


Table 1: Eskom’s planned additions to transmission network by 2030





Transmission line length (km)




–275 kV AC




–400 kV AC




–765 kV AC




Transformer capacity (MVA)




Number of transformers




Note: AC – alternating current

Source: Eskom’s TDP 2021–30; Global Transmission Research


Of the planned ZAR118 billion, ZAR87 billion (74 per cent) will be spent on capital expansion projects in all the provinces, ZAR19 billion will be invested in the refurbishment of existing infrastructure, ZAR674 million will be spent on production equipment, ZAR3.1 billion on environmental impact assessment (EIA) and servitude, ZAR4 billion on telecoms, and ZAR4.1 billion on strategic spares.


Under the ZAR87 billion, 32 per cent or ZAR27.3 billion will be spent on strengthening the infrastructure, while another 26 per cent or ZAR22.7 billion is earmarked for integration of upcoming IPP plants into the grid network.


Figure 4: Eskom's planned investment in transmission sector, 2021–30

Source: Eskom’s TDP 2021–30; Global Transmission Research


Figure 5: Major projects planned under TDP 2021–30

Source: Eskom’s TDP 2021–30; Global Transmission Research


Cross-border links

The utility will also work on strengthening its cross-border links, which in the long term will form a transmission backbone connecting all the SAPP member countries, with the aim of creating a regional power corridor. SAPP comprises 12 southern African countries, namely, Angola, Botswana, Democratic Republic of Congo (DRC), Eswatini, Lesotho, Malawi, Mozambique, Namibia, South Africa, Tanzania, Zambia and Zimbabwe.


Currently, Eskom, along with other SAPP counterparts, is implementing the Botswana–South Africa (BOSA) interconnector and the Mozambique–Zimbabwe–South Africa (MOZISA) transmission project, which are part of the 11 priority transmission projects being implemented in the SAPP region.


BOSA involves a 210-km-long, 400 kV transmission line, which will connect Isang (Botswana) to Watershed (South Africa) and the proposed Watershed B substation. It will help enhance electricity trade between South Africa and Botswana as well as other SAPP members. The project is planned for commissioning in 2024.


MOZISA proposes to link three Southern African Development Community (SADC) countries—Mozambique, Zimbabwe and South Africa. In March 2019, SAPP urged Zimbabwe’s ZESA Holdings and Eskom to expedite feasibility studies for the Mozambique–Zimbabwe component of the project. The MOZISA project is expected to be commissioned by 2022.


Battery Energy Storage System (BESS)

BESS can become a key component of meeting South Africa’s long-term RE goals. It can be linked to solar and wind energy generation plants, so that energy generated during periods of low generation costs and demand can be stored for distribution during periods of high costs and demand. This will improve the cost-effectiveness of RE generation.


To this end, in August 2020, Eskom invited bids for the design, engineering, supply, construction, erection, testing and commissioning of a BESS, with a minimum of 80 MW/320 MWh usable capacity, at the Skaapvlei substation in the Western Cape province of the country.


The contract is being financially supported by the World Bank, African Development Bank (AfDB) and New Development Bank, under the Eskom Investment Support Project (EISP) and Eskom Renewables Support Project (ERSP). EISP aims to enhance Eskom’s power supply and energy security so as to support economic growth objectives. ERSP aims to facilitate accelerated development of large-scale RE capacity in the country. Both projects share a common goal of supporting the long-term carbon mitigation strategy of South Africa.


Smart Grid Vision 2030

South Africa’s electricity infrastructure is aged and requires renovation and expansion in order to meet its growing electricity demands. Hence, to respond to increasing energy demand in an efficient manner, the South African National Energy Development Institute (SANEDI) drafted the Smart Grid Vision 2030 as part of the South African Smart Grid Initiative (SASGI) in 2013. The objective of the Vision is to bring together all parties involved in the smart grid industry in order to build a focused, integrated, optimal smart grid network across the country. Hence, it is crucial for Eskom to meet its target under the TDP 2021-30 as the ambitious smart grid plan must be backed by an efficient and reliable transmission system.


Challenges and way forward

South Africa plans to add 30 GW of new generation capacity by 2030, but as the country’s grid network is in critical need of refurbishment, strengthening and expanding the transmission network becomes inevitable for the stakeholders of the sector. Therefore, the power utility is now focusing its efforts on ensuring the timely and efficient execution of the projects under the ZAR118 billion transmission plan, which aims to increase reliability of the grid network, meet future demand growth and integrate the upcoming generation capacity. 


But the cash-strapped utility is facing several challenges that need to be addressed including way leave acquisition/right-of-way (RoW) acquisition, which leads to long delays in project execution, lack of funds, deteriorated operational performance and inefficient industry structure. Thus the unbundling of Eskom becomes the most awaited step for revamping the South African power sector, as the move will create a more transparent and efficient power sector model in the country.