Issue 152, April 2025

Roundup of major energy and electricity news and developments: 31 March to 13 April 2025

1. EDF Renewables energises South Africa’s first IPP-built main transmission substation.

2. Fuel tax fury: RAF battles SARS over R5.1bn refund to Eskom.

3. Grid opens to private investment with new transmission and wheeling regulations.

4. Ministerial determination announced for 1164 km private powerline programme.

5. Exemption from air pollution limits granted to eight Eskom coal-fired power stations.

6. South Africa and China sign MoU to further cooperation in nuclear technologies.

7. New coal-fired power and renewables considered as Botswana power crisis bites.

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1. EDF energises South Africa’s first IPP-built main transmission substation.

In a landmark achievement for South Africa’s energy and electricity sector, EDF Renewables has commissioned the Koruson 400/132 kV main transmission substation (MTS) near Noupoort in the Northern Cape. This marks the nation's first fully self-built transmission substation developed by an independent power producer (IPP), capable of integrating up to 1.5 GW of renewable energy into the national grid. The substation was energised on 5 April 2025 and demonstrates the capabilities of IPPs in delivering complex grid infrastructure projects. Developed in partnership with H1 Holdings, Gibb-Crede and a local community trust, the substation is a pivotal component of the Koruson 1 project cluster. This cluster comprises three wind farms – Coleskop, San Kraal and Phezukomoya – collectively delivering 420 MW of clean energy. Additionally, the forthcoming Koruson 2 project, spearheaded by Envusa Energy, will contribute an extra 520 MW through two wind farms and a solar facility. Tshepo Tshivhasa, head of grid engineering at EDF Renewables, emphasised the project's significance: “This is the first greenfield transmission substation in more than seven years to be connected to the grid, and it is the first greenfield transmission substation that is a full self-build, i.e. developed, financed, engineered, constructed and commissioned by an independent power producer”. This milestone aligns with South Africa's Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), which aims to diversify the energy mix and reduce reliance on fossil fuels. The successful commissioning of the Koruson MTS not only enhances grid capacity but also sets a precedent for future IPP-led infrastructure projects, signalling a transformative shift in the nation's approach to sustainable energy development.

2. Fuel tax fury: RAF battles SARS over R5.1bn refund to Eskom.

A fierce dispute has erupted between the Road Accident Fund (RAF) and the South African Revenue Service (SARS) over an unprecedented R5.1bn deduction from RAF’s fuel levy allocation, intended to cover diesel rebate payments to Eskom. RAF, which relies heavily on a liquid fuel levy for its operations, has warned that the deduction has rendered it unable to pay thousands of claimants. RAF CEO Collins Letsoalo has slammed SARS’ move as unlawful, stating that SARS had no legal authority to reallocate earmarked fuel levy funds to cover rebates on Eskom’s use of diesel for power generation. Letsoalo said the RAF had obtained a court interdict to prevent the transfer, but SARS is now appealing the ruling, prolonging the deadlock. “SARS has taken funds not appropriated for Eskom,” he said, warning that the diversion of funds would collapse RAF’s ability to settle claims. SARS, on the other hand, argues that it is acting under the Public Finance Management Act and a National Treasury directive authorising the payment of R5.1bn in diesel rebates to Eskom, presumably because Eskom’s diesel use is for power generation as opposed to road transportation. National Treasury remains silent on the legality of reallocating earmarked fuel levy revenue. Legal experts say the dispute exposes serious governance flaws and blurred fiscal accountability. The case is set to escalate into a constitutional test on the use of hypothecated taxes, i.e. taxes that are collected for a specific, predefined purpose, rather than being pooled into a general revenue fund. The dispute pits Eskom’s cash flow needs resulting from its massive diesel burn for power generation, against the statutory purpose of road accident compensation. Meanwhile, road accident victims and their legal representatives are said to be left in limbo as RAF’s cash crisis deepens.

3. Grid opens to private investment with new transmission regulations.

In a major push to overhaul South Africa’s strained electricity infrastructure, government has published draft regulations paving the way for private sector participation in building, financing and operating national transmission infrastructure. The move is part of the Independent Transmission Programme (ITP), which targets 3222 MW of additional transmission capacity by August 2029, and an ambitious buildout of 14 000 km of new lines by 2032, at a projected cost of R440bn. Energy Minister Dr Kgosientsho Ramokgopa said the draft Electricity Transmission Infrastructure Regulations are essential to enabling private capital to step in where public funding alone cannot meet the scale of investment needed. The regulations specify licensing requirements for independent transmission companies, including technical expertise, financial soundness, and transparency in cost recovery. They also outline criteria for procurement processes, compliance with the Grid Code, and how value for money will be assessed. In parallel, the National Energy Regulator of South Africa (NERSA) has released long-awaited regulatory rules on network charges for third-party wheeling of electricity across Eskom and municipal networks. This marks a game-changing shift in enabling wheeling and trading of electricity as it gives clarity to how wheeling fees should be calculated when energy from an independent power producer is transmitted across public networks to private off-takers. Together, the transmission and wheeling reforms are expected to boost investor confidence, unlock long-stalled renewable energy projects, and create a more competitive electricity market. Stakeholders have until 3 May 2025 to submit comments on the draft transmission regulations, which are seen as a pivotal step in accelerating South Africa’s transition to a more decentralised and modern power system.

4. Ministerial determination announced for 1164 km private powerline programme.

South Africa is opening its electricity transmission network to private investment with a landmark pilot procurement programme to finance, build and operate 1164 km of new 400 kV powerlines. The initiative started with the announcement on 31 March 2025 of a Section 34 ministerial determination in terms of the Electricity Regulation Amendment Act, and will be followed by prequalification of bidders and then a request for proposals in November 2025 under the Independent Transmission Programme (ITP) of the IPP Office. This marks the first time private capital will be directly involved in developing core grid infrastructure. The pilot forms part of a broader plan to decentralise South Africa’s transmission sector and unlock 3222 MW of new capacity by August 2029. Electricity Minister Dr Kgosientsho Ramokgopa confirmed that the pilot will focus on six strategic corridors across Limpopo, Mpumalanga, Northern Cape, Eastern Cape and Western Cape, where grid bottlenecks have delayed renewable energy projects. The National Transmission Company of South Africa (NTCSA) will remain the sole buyer and system operator, while private developers will be required to meet strict financial and technical requirements. However, a clause allowing NTCSA to buy back the infrastructure after 25 years has raised concerns over cost and regulatory certainty. Industry observers warn that while the plan is a bold step forward, unresolved issues around risk allocation, land access and tariffs could limit private sector appetite. Nonetheless, the programme has been welcomed as a critical move to relieve Eskom’s strained balance sheet and accelerate the transition to a more diversified energy system. Government hopes this model will crowd in investment to help meet the estimated R440bn required for 14 000 km of new lines by 2032. Public consultation on the procurement framework is expected in mid-2025. ​

5. Exemption from air pollution limits granted to eight Eskom coal-fired power stations.

On 31 March 2025, South Africa's Environment Minister Dion George granted conditional exemptions from minimum emission standards (MES) to eight Eskom coal-fired power stations, allowing them to continue operating despite significantly exceeding the country's legally prescribed air pollution limits. This was done to ensure security of electricity supply in South Africa, while sacrificing environmental protection and public health. Six Eskom power stations received five-year exemptions, expiring on 1 April 2030, namely Kendal, Lethabo, Majuba, Medupi, Matimba and Tutuka. These exemptions are contingent upon Eskom implementing targeted emission reduction measures, enhancing air quality monitoring, and accelerating the integration of renewable energy sources. For instance, Medupi's exemption includes a mandate to conduct a revised cost-benefit analysis for the installation of flue gas desulphurisation technology within six months. Two other Eskom power stations, namely Duvha and Matla, were granted exemptions aligning with their planned decommissioning dates in 2034. These exemptions acknowledge the impracticality of retrofitting aging infrastructure for full MES compliance in the medium term. Minister George emphasised that these exemptions are not a “blanket reprieve” but are tailored to each facility with stringent conditions. Minister George indicated that while Eskom had applied for much longer exemptions, the shorter exemptions granted were based on Eskom's own plant decommissioning schedule. He further indicated that if Eskom’s decommissioning dates were extended, he would have to reconsider and may have to extend the exemption periods granted. Since 2010, Eskom has been given three five-year exemptions from compliance with South Africa's MES. Some analysts believe it is most unlikely the power stations will comply with the South Africa's weak MES within the extended timelines. Instead, these analysts believe that South Africa will simply be held to ransom again by Eskom until all these power plants are finally shut down.

6. South Africa and China sign MoU to further cooperation in nuclear technologies.

In a move to enhance nuclear power in South Africa and advance nuclear technology in the country more broadly, the South African Nuclear Energy Corporation (Necsa) and the China National Nuclear Corporation (CNNC) signed a Memorandum of Understanding (MoU) on 8 April 2025. This agreement aims to foster collaboration in the production of nuclear fuel, the development of small modular reactors (SMRs), and other areas. The nuclear MoU signals South Africa’s growing ideological and trade alignment with China, amid tensions in the relationship between the USA and South Africa, Russian aggression in Ukraine, and other geo-political developments. However, the MoU is said to be non-binding and does not imply exclusivity, allowing South Africa and Necsa to engage with other international nuclear technology partners. The signing took place during a ministerial visit to China led by South Africa’s Minister of Electricity & Energy, Dr. Kgosientsho Ramokgopa, accompanied by Necsa’s Group CEO, Mr. Loyiso Tyabashe. During the visit, Minister Ramokgopa and officials from his department, Eskom and Necsa visited a pilot commercial SMR installation site in China – one of the few operating, land-based SMRs globally. The delegation's agenda focused on efforts to strengthen South Africa’s nuclear power capacity, including in the nuclear fuel value chain. Dr. Ramokgopa also emphasised that the collaboration underscores South Africa’s commitment to enhancing nuclear research and technology capabilities while fostering the next generation of nuclear scientists. This partnership aligns with South Africa's broader nuclear technology goals, which include the production of nuclear radioisotopes for medical use, extending the life of the SAFARI-1 research reactor beyond its 2030 license expiration, and developing a new multi-purpose research reactor at Pelindaba. The government has allocated R1.2bn in seed funding for this initiative, seeking additional investment and innovation through international collaboration. 

7. New coal-fired power and renewables considered as Botswana power crisis bites.

Botswana has approached South Africa’s Eskom for a new short-term power purchase agreement (PPA) to import up to 200 MW of electricity as the country faces an intensifying supply crisis. However, Botswana now faces sharply higher tariffs, with insiders indicating that Botswana Power Corporation (BPC) is now being asked to pay more than double previous rates, making imports a costly but necessary stopgap. Eskom has reportedly increased its export tariff significantly, reflecting its own cost recovery drive, putting pressure on BPC. Eskom confirmed receipt of Botswana’s proposal and is evaluating it. The utility has historically supplied surplus power to its neighbours under the Southern African Power Pool framework, but the pricing landscape has changed. Compounding matters, BPC is behind on payments of some R3.5bn to Eskom, raising concerns over the Botswana utility’s financial sustainability. With its power supply under pressure due to breakdowns at Morupule B power station and a sharp rise in domestic demand, Botswana is scrambling to secure both short- and long-term energy solutions. In a controversial move, if BPC cannot sort out the failures at Morupule B, Botswana is said to be considering a new 615 MW coal-fired power plant to bolster baseload capacity. The plant, expected to be procured on a build-own-operate basis, would deepen the country’s coal dependence. However, in a bid to diversify its energy mix, Botswana recently issued a request for proposals (RFP) for 1540 MW of renewable energy capacity, signalling a possible pivot toward clean energy. The country’s multi-track strategy – importing expensive emergency power, looking at new coal capacity and scaling renewables – highlights the urgent and complex decisions facing Botswana as it navigates its precarious electricity position.

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