Cape Town – Emboldened by President Cyril Ramaphosa’s announcement that municipalities will be able to procure their own power from independent power producers (IPPs), the City has started the ball rolling by signing a grant agreement worth more than R12 million with the US Trade and Development Agencies to conduct a feasibility study on a natural gas distribution network for Cape Town.
The DA-controlled administration has been fighting since 2015 for municipalities to secure their own electricity.DA spokesperson on public enterprises Ghaleb Cachalia said the party was calling on Ramaphosa to immediately drop his government’s opposition to the City’s court case seeking Section 34 permission and grant approval within seven days.
The City will then prove to be the case study of an excellently governed municipality procuring directly and keeping the lights on and the economy going. “If Ramaphosa is serious, the national government will stop fighting the City in court and start issuing these notices immediately,” he said.
According to the City, the future of energy lies in greater decentralisation and diversification of generation with complementary technologies such as gas and renewables providing lower cost and cleaner solutions.
Mayor Dan Plato said: “The City has been putting pressure on the government for many years to reshape the energy regime in South Africa to the benefit of our people and businesses. The City is a staunch proponent of more affordable, secure, cleaner and diversified energy sources.”
The City will first need to complete a City-developed Integrated Resource Plan (IRP) to best optimise the supply and demand options.
“We are undertaking a study to determine how best to overcome energy poverty, through various projects such as installing solar kits, solar-home systems, increasing free basic electricity, improving access to gas, among others. Improving access to affordable electricity is a key deliverable that we are investigating at the moment.”
On Thursday, President Ramaphosa, in his State of the Nation address, said: “We will negotiate supplementary power purchase agreements to acquire additional capacity from existing wind and solar plants. We will also put in place measures to enable municipalities in good financial standing to procure their own power from independent power producers.”
Plato said broad statements were not enough. “It is not going to suffice in this critical situation that we all find ourselves in and which is as a result of Eskom and national government’s failure to effectively manage energy supply in South Africa. Cape Town is eager to help residents survive the ongoing load shedding, but we need details as soon as possible on when we can start procuring from IPPs.”
Energy analyst Ted Blom said: “Government has been grappling with Eskom and electricity issues since 2001 and attempted to solve the problem through an unsuccessful effort to entice the private sector into building power stations under a capped rate of return. There are more questions around the legislative amendments.”