Energy

Cape Town to buy power from commercial producers

Staff Writer

 ·25 Jul 2022

The City of Cape Town is starting a programme to buy power from commercial and industrial producers who will be allowed to send power to the grid for cash, mayor Geordin Hill-Lewis said.

Private electricity producers must register with the city to qualify for the programme, Hill-Lewis told reporters Monday, as noted by Bloomberg.

The city plans to roll out a programme to residential producers once a commercial programme has been established, he said.

Meanwhile, John Steenhuisen – leader of the Democratic Alliance, the country’s opposition party – said he met with president Cyril Ramaphosa to discuss the ongoing electricity crisis, while providing suggestions to the president on how to alleviate the energy crisis.

“There are some urgent steps aimed at securing our short-term electricity supply, and then there are medium-term steps which will take a little longer but are critical to the sustainability of our energy sector,” he said.

Some of these interventions lie within Eskom, and some lie outside of the state-owned utility, where the bulk of the country’s future energy solutions will ultimately have to come from, he said.

In the short-term, the DA pointed to the following steps:

1. Declare a ring-fenced State of Disaster in the electricity sector. Not a State of Emergency, which is inappropriate, but a State of Disaster which will suspend all legislation currently blocking solutions to this crisis.
2. Issue a blanket Section 34 determination so that all municipalities in good financial standing can procure, generate and store their own electricity.
3. Incentivise and ease the regulations on small-scale embedded generation such as rooftop solar.
4. Waive all local content requirements for electricity procurement. The only priority now is restoring our supply.
5. Waive all preferential procurement requirements. Only the quickest and cheapest solutions will do, and we cannot afford the extra layer of cost that BEE adds.

Following this, the party suggested these medium-term interventions:

Outside of Eskom:

• Form an Emergency Electricity Commission, headed up by a power utility specialist, to deal with the crisis.
• Update the Integrated Resource Plan (IRP). In its current (2019) guise it is based on entirely incorrect assumptions about additional energy sources and available Eskom capacity.
• Establish an Independent System Market Operator so that the transmission grid can be run separately from Eskom.
• Aggressively pursue new generation capacity from diverse sources and technologies.
• Establish proper governance structures to oversee the foreign funding for our transition away from fossil fuels.
• Invest in grid infrastructure and system upgrades – this is as important for new generation.
• Build more storage capacity. Investing in the technology of batteries and other forms of storage (such as pumped storage) will take a lot of pressure off Eskom.

Inside Eskom:

• Deal with sabotage through integrated security and intelligence measures and by vigorously prosecuting the treasonous saboteurs.
• Employ engineers and cut the dead wood at Eskom. The money saved by letting deployed cadres go will pay for the skills needed to fix the utility.
• Ramp up maintenance on Eskom’s generation fleet. Fixing just half of the current 17,000MW of broken generation capacity will end load-shedding.
• Review all Eskom coal contracts to eradicate corruption and ensure best-price contracts.

Steenhuisen welcomed the City of Cape Town’s announcement that it will now pay cash (as opposed to credits on bills) for excess electricity generated by commercial and industrial generators to incentivise them to feed as much energy as they can back to the grid.

“We also welcome their announcement that commercial and industrial generators will now be allowed to sell more electricity to the City than they use – in the past they were required to be net consumers. Both these steps are firsts in South Africa, and the goal is to extend this to residential customers too, once the take-up by industrial and commercial generators has been ascertained.”

Read: Eskom warns of load shedding again – two days after ending it