Eskom’s Transmission Division, which will form part of the separated National Transmission Company South Africa once established later this year, will begin relying more heavily on the engineer, procure and construct (EPC) contracting model as it seeks to accelerate the pace at which transmission infrastructure is built in a context where the lack of grid has become a key impediment to the injection of new generation capacity.

In an address to suppliers, MD Segomoco Scheppers reported that South Africa needed to add more than 1 500 km of new transmission lines yearly between now and 2032 to ensure that the infrastructure was in place to facilitate the addition of more than 50 GW of new generation capacity, mostly in the form of variable renewables, over the period.

He revealed that the division was currently adding only 300 km of new power lines yearly, a pace that was entirely insufficient to ensure that 14 000 km of new lines were installed over the ten-year horizon from 2022 to 2032.

In the ten years from 2013 to 2022, only 4 347 km of new powerlines were added.

In addition, more than 122 600 MVA worth of transformation capacity would have to be added, representing 77% of Eskom’s current installed base of just over 160 000 MVA. In the prior ten-year period only 19 060 MVA was introduced.

Scheppers reported that the EPC model would be used in tandem with Eskom’s more traditional procurement models in an effort to ensure that transmission infrastructure was delivered at “a scale and at a speed that we have not done before”.

The model would involve either Eskom Transmission or an owner’s engineer completing the front-end engineering design and overseeing the procurement of a single EPC contractor, which would be expected to complete the detailed design, procure the necessary material, and construct and commission the solution, before handing it over as a fully functional and compliant asset to the transmission division.

Transmission project GM Naresh Singh said the EPC contracting model was being introduced not only because of the “monumental task ahead” but because Eskom’s current model had become too complex and time consuming to ensure that the grid was deployed at the pace currently required.

“Our processes have become bureaucratic, lethargic, non-value-creating and ineffective and we are very convinced that changing strategy to be EPC-heavy will result in better outcomes for transmission and the country at large,” Singh explained.

Using EPC as the main “strategy of choice” was also an acknowledgment that Eskom, which had once been regarded as a reference point internationally, had fallen far behind global best practice and that its technological status had “substantially diminished”.

There are reportedly also separate discussions under way about the prospect of employing public-private partnerships to build and operate grid assets for a period of about 20 years, but Eskom did not discuss such an approach during the meeting with suppliers.

Scheppers acknowledged ongoing scepticism regarding the credibility of the investment plan in light of Eskom’s previous failure to deliver new grid infrastructure in line with previous Transmission Development Plans.

However, he said there was recognition at the highest level of government about the constraint the lack of grid was placing on the connection of much-needed generation capacity, which became apparent when no wind projects advanced during a recent procurement round for 3 200 MW of new wind capacity, owing to a lack of grid.

There was also a clear message that grid investment should be prioritised as part of conditions linked to the R254-billion debt relief being extended to Eskom by the National Treasury.

He reported that 80% of the R74-billion required to invest in the grid over the coming five years had already been secured, which he said should provide the supplier community with a “higher degree of confidence” that the investments would materialise.

“All the key stakeholders, from Eskom through government, are fully aligned around the imperative to invest in and to expand the transmission grid.

“So, this is not a debate any more . . . I think it is very clear that transmission is the central focus of how we want to address the energy security of the country.”

Scheppers also reported that some progress had been made in addressing the delays associated with securing the necessary servitudes, highlighting Eskom’s recent success in expropriating a number of properties for the construction of transmission lines in Limpopo.

“This was actually a test case for us to establish that the expropriation process as per the law today can absolutely work for us, and this has now been proven.

“We hope we don’t need it, but should we need it we need to be able to activate it and secure the routes that we require.”

Scheppers also urged Eskom employees, suppliers and contractors to approach the build programme with integrity, noting the reputational damage that had been done to both the utility and some large companies in the recent past when evidence emerged about unethical conduct.

“It has been said to me that this is like the World Cup for transmission, and I think that’s correct.

“But although the 2010 World Cup was quite a success . . . there were also a few things that happened during that period that were not good.

“We must not have a repeat of those things. We need to make sure that we behave and conduct ourselves in a professional and ethical manner at all times.”