An out for municipalities looking to escape Eskom
Incentives for municipalities and businesses to procure their own power have become more evident amid the energy crisis, says James Beatty, the CEO of Enpower Trading.
Enpower Trading is a National Energy Regulator of South Africa (Nersa) licensed electricity trader that aims to accelerate the wheeling of energy and trading as a municipal service.
Eskom regards wheeling as allowing privately generated power to be transmitted across the national grid to customers who want it through a willing buyer/seller model.
James Beatty, the CEO of Enpower Trading, said that the company aims to increase electricity supply by transporting energy on behalf of independent power producers (IPPs) to customers, businesses and the government.
According to Beatty, it seeks to ensure municipalities operating on the local distribution grids retain their profits (revenue surplus-neutral) while providing customers with cheaper and cleaner electricity.
Wheeling ultimately allows IPPs to use the existing grid infrastructure to supply a household. Both the City of Cape Town and Johannesburg have introduced a wheeling program.
Beatty said that some of the benefits of wheeling include assisting municipalities to meet consumers’ energy needs from renewable sources and generation projects located within the municipal grid.
“More importantly, a trading solution ensures that a municipality does not lose its customers but enables them to purchase cheaper and cleaner electricity – ensuring the municipal income from these customers is retained.”
Wheeling and trading also mitigate “off-grid flight”, which threatens the municipality’s electricity income, traditionally accounting for more than half of municipal revenues.
Additionally, using this model would lead to municipalities increasing their autonomy and reducing their dependence on Eskom as its sole electricity supplier, he added.
Beatty said that a pilot project in George Municipality has been successful, with Enpower Trading wheeling electricity directly through the municipal grid to four of its own low-voltage customers.
“The project involves the connected customers and one independent power producer (SolarAfrica Energy) and is based on a single 1.8MWp solar project installed on the premises.”
Bongani Mandla, the electrotechnical director at George Municipality, said that its goal is to explore alternative energy sources further and, with all the privately generated energy coming into the grid, reduce load shedding by lessening the reliance on Eskom.
Although the country needs additional power, electricity provided through IPPs is currently facing more compliance hurdles and rules, making it harder to take advantage of the national grid.
Earlier this month, the Democratic Alliance responded to proposed regulations relating to private connections to the national grid from Nersa, stating that: “Eskom is increasing the investment risk premium by asking IPPs to spend more on power generation projects with no guarantee they would obtain grid access.”
This ultimately undermines its own endeavours to bring online private producers and alleviate pressure on Eskom.
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