Municipalities seek ways to escape Eskom’s power crisis – including ‘electricity trading’

The George Municipality in the Western Cape has announced plans to develop a pilot project where it will investigate the possibility of ‘wheeling electricity’ on its grid.

In essence, the municipality aims to develop a more sustainable business model, which will allow the delivery of electricity generated by a private operator at one location to a buyer or off-taker in another location via the municipal network.

This forms part of a larger process where the municipality is aiming to migrate to a more sustainable financial model in the future, it said.

“By wheeling electricity through the municipal grid to businesses and individuals, it creates another revenue stream for the municipality, encourages and attracts renewable energy investment, and establishes a business-friendly environment for local businesses and residents.”

Following a council decision, the municipality said it will now commence with the process of amending its by-laws and policies, and engage with the national energy regulator (Nersa) with regards to the required trading licenses.

“The decision taken by the George municipality would make it amongst the first in South Africa to explore electricity wheeling and energy trading,” said the DA’s Deidré Baartman.

“In these challenging economic circumstances, the innovative pilot project creates an economic environment that not only attracts investment, but allows businesses to grow and develop.”

Energy expert Chris Yelland has previously indicated that wheeling and electricity trading could be a key part of South Africa’s energy mix in the future.

“It is becoming apparent that centrally planned procurement of generation capacity of all technologies by the (energy department) and its Independent Power Producer Office will not be able to meet the immediate needs for increased generation capacity to avert the threat of rolling power cuts or load shedding in South Africa in the next two to three years.

“With Eskom not even able to meet declining demand, there is also a growing realisation by all electricity customers that they need to work on self-generation to supplement their grid electricity needs, as well as to wheel power for their own use from external sources of distributed generation,” he said.

Western Cape shift

The Stellenbosch municipal council has said it also will commence with an investigation into the use and generation of alternate electricity energy supplies as a way of avoiding Eskom and load shedding.

The decision puts Stellenbosch in the lead to potentially become the first municipality in the country to eliminate load shedding, it said.

“The promulgation of the Electricity Regulation Act Regulations in October 2020 opened the door for municipalities to start investigating how they can generate their own electricity and purchase electricity from independent power producers (IPP).

“We are proud to be the first out of the starting blocks in this regard,” the council said.

“While there is still a long road ahead in the battle against load shedding, today’s decision marks the official start of a journey for Stellenbosch Municipality that may culminate in energy independence and long-term energy sustainability.”

Read: Stellenbosch wants to be the first municipality in South Africa to leave Eskom and load shedding behind

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Municipalities seek ways to escape Eskom’s power crisis – including ‘electricity trading’