S.Africa's Eskom launches National Transmission Company

In a move set to revolutionize the energy sector in South Africa, Eskom has officially launched the National Transmission Company of South Africa (NTCSA). This initiative is part of the country's energy action plan unveiled by President in July of 2022, with a primary aim of ensuring a secure, reliable, and sustainable energy supply for the nation. CNBC Africa's Babazile Makhubalo recently spoke with Dr. Kgosientsho Ramokgopa, the Minister of Electricity and Energy in South Africa, to delve deeper into the significance of this development and its potential impact on the industry. During the interview, Dr. Ramokgopa highlighted the key aspects and benefits of the NTCSA, emphasizing the importance of democratizing energy generation, driving investments in the energy space, and enhancing affordability for consumers and industries alike. The establishment of the NTCSA marks a significant milestone in South Africa's energy landscape. Dr. Ramokgopa underscored the importance of fostering competition and innovation in the sector, with the aim of driving down electricity prices and making energy more accessible for both consumers and industries. By democratizing energy generation and ensuring non-discriminatory access to the grid, the NTCSA aims to attract greater investments in the South African energy space, particularly in the generation segment. This, in turn, is expected to spur research and development efforts among players, leading to increased price competitiveness and, ultimately, more affordable electricity for end consumers and industries. The Minister expressed confidence in the NTCSA's ability to deliver on its targets, including adding 11,000 megawatts and rolling out 1,250 kilometers of new transmission lines by 2027. With an allocated budget of 112 billion rands for the next five years, the government is committed to supporting the rollout of new transmission capacity and accelerating the transition towards a more sustainable energy future. By 2030, the aim is to add an additional 30,000 megawatts to the grid, further solidifying South Africa's energy security and reliability. Affordability emerged as a key focus area during the discussion, with Dr. Ramokgopa emphasizing the need for electricity prices that do not strain households or hamper the competitiveness of industries. He pointed to the rising costs of electricity over the past 16 years, highlighting the negative impact on industry competitiveness and employment. The Minister outlined the potential of renewables, such as wind and solar energy, in addressing the escalating cost of electricity. By increasing the share of renewables in the energy mix, South Africa can unlock cost savings and create a more sustainable energy ecosystem. Investments play a vital role in expanding and upgrading South Africa's electricity infrastructure. Dr. Ramokgopa stressed the scale of investments required, estimating that building 14,000 kilometers of new transmission lines would necessitate approximately R390 billion. To finance such projects, partnerships with reputable institutions and innovative financing mechanisms beyond the NTCSA balance sheet are being explored. The Minister highlighted efforts to de-risk investments and attract private sector participation in financing the infrastructure upgrades. With a focus on industrialization and localization, the government aims to leverage the NTCSA's build program to drive economic growth and create opportunities for domestic production. In conclusion, the launch of the National Transmission Company of South Africa heralds a new era of energy development and sustainability in the country. With a clear focus on democratizing energy generation, enhancing affordability, and driving investments in renewable energy, the NTCSA paves the way for a more competitive and resilient energy sector. As South Africa works towards its energy transition goals, collaboration between public and private stakeholders will be key to unlocking the full potential of the NTCSA and ensuring a reliable energy supply for the nation.