The National Transmission Company of South Africa (NTCSA) was officially unbundled from Eskom and launched as a wholly owned subsidiary this week.
The unbundling of Eskom’s transmission business, responsible for moving large amounts of electricity from power plants and substations into an independent transmission system is seen as a major step towards liberalising the South African electricity industry, which has for over 100 years been dominated by Eskom.
The NTCSA seeks to establish a transparent, fair and competitive platform upon which electricity industry participants can trade electricity.
It will also be responsible for an unprecedented grid expansion effort. About 14,000 kilometres of transmission lines need to be built within a decade to accommodate renewable energy projects coming online. In 2023 Eskom only managed to build 74km.
Grid expansion is expected to cost R112 billion over the next five years, supporting the introduction of 30GW of green power onto the grid by 2029.
Funding will be sought from already approved loans, and National Treasury’s taking R254 billion of Eskom debt onto its balance sheet has allowed NTCSA to generate significant cash from operations.
Kgosientsho Ramokgopa, Minister of Electricity and Energy said: “We think that the credit-enhancing instruments we’ve been working on, with, among others… the World Bank, are very innovative financing instruments that we find exceptionally attractive.”
Partnering with the private sector will be key to developing a hybrid delivery model which will work with private sector capacity to speed up delivery, he said.
Companies will be involved in engineering, procurement and construction, and independent transmission projects.
The formation of the new company has been widely welcomed by industry.
[Image: Michael Schwarzenberger from Pixabay]