Private company has a 22.5GW pipeline for grid connections

The Green Transmission Company, a private company that provides end-to-end solutions for the financing, development and construction of grid infrastructure, says it has a pipeline of projects that will connect 22.5GW of renewable energy to the grid by 2028.

This represents over R30bn worth of new renewable energy projects that will be connected to the grid.

The company, which is led by energy sector veterans — including Enos Banda a former Eskom CEO and former chair of the National Energy Regulator of SA — specialises in the development of finance and building of grid infrastructure for renewable energy developers.

The 22.5GW project pipeline, which includes a combination of projects from different renewable energy project developers that want to accelerate access to the grid, is based on projects that “have to be developed and available by 2028”.

“We are increasingly also seeing a market for large-scale consumers of electricity who are struggling to get supplied by renewable energy developers because of grid access issues,” Banda told Business Day.

Banda said the company was not only working on smaller transmission projects that developers typically had to invest in to connect their projects to the grid, but also on projects requiring long-distance transmission lines which was where the largest gap was at present.

“One of the projects that we are doing will be in excess of 100km, which will bring about 1GW of renewable power to the grid,” he said.

The lack of available grid connection capacity is one of the biggest hurdles standing in the way of connecting new renewable generation capacity to the grid. Expanding the transmission grid will significantly contribute to ending load-shedding by allowing more new generation capacity to be connected.

Eskom’s Generation Connection Capacity Assessment published in 2023 indicated that parts of the transmission network in the most favourable areas for solar and wind generation — the Northern Cape, Eastern Cape and Western Cape — had almost no capacity, as all of the capacity was depleted from previous bid window rounds and private off-takers.

SA needs an estimated R390bn to fund Eskom’s current transmission development plan, which outlines the need for the installation of more than 14,000km of new high-voltage power lines by 2032.

Given Eskom’s weak balance sheet, and to speed up the pace of new grid infrastructure rollout, the government has decided to start allowing private sector investors to participate in funding this type of infrastructure.

The Treasury announced in budget documents tabled in parliament on Wednesday it would launch a project at end-July that would enable private investment in electricity grid infrastructure. It could not share details of the model to be used, saying these were yet to be determined.

However, electricity minister Kgosientsho Ramokgopa has previously said the model would probably not be restricted to participation through financing only but would be based on a build, operate, transfer model.

Any new assets will eventually be transferred to the original procuring entity, which will be Eskom, through the national transmission company.

Banda said the work his company was doing to build grid infrastructure could be done without any changes to the regulatory environment.

“If you want to do something based on a policy change you will wait for a long time. We designed our model for grid development in such a way that we can execute within the current policy environment.”

The team consists of leading grid planners and designers, substation designers and other professionals who “understand how the environment works and who have designed and built grid for and with Eskom”.

He said: “We are not trying to contest Eskom’s space under the current policy framework. We complement it by building infrastructure that they need to deliver a service their customers want. We are just able to deliver this earlier than Eskom would be able to because of their weak balance sheet.

“This does not mean, at this time, that we get to own and control what we build ... Eskom has the responsibility to manage and operate the asset.”

Banda said domestic and global financial institutions were willing to commit the capital needed to build grid infrastructure under the current policy and regulatory environment.

“We are watching and contributing to the transformation of the transmission space for private sector involvement, but we are not waiting for that change to happen.”

The renewable energy project developers the company works with would face waiting times of up to 10 years if they were to rely on Eskom to build the grid capacity they need.

“For them, there is a clear financial advantage to contribute to the construction of that grid at an earlier time.”

erasmusd@businesslive.co.za