Goodbye Eskom – South Africa’s richest city officially looking at alternatives
The City of Johannesburg, through its municipal-owned entity City Power, is assessing the viability of buying the Kelvin Power Station and Egoli gas as a way to reduce its reliance on Eskom.
Member of the Mayoral Committee (MMC) for Environment and Infrastructure Services, Jack Sekwaila, announced the launch of a feasibility study to assess the viability of the move.
“At this stage, discussions remain at an early and exploratory phase, and neither Kelvin Power Station nor Egoli Gas has been formally engaged regarding any potential acquisition,” he said.
Importantly, the city noted that the feasibility study is intended to inform decision-making and does not constitute a decision to acquire.
It added that both Kelvin Power Station and Egoli Gas historically formed part of the city’s broader energy ecosystem, and their consideration represents a possible “reintegration” rather than an entirely new concept.
“The feasibility study, which has been formally tabled and noted by council, reflects a strategic and
responsible step in evaluating options that can support the stabilisation of electricity supply,” the city said.
The city also wants to improve affordability over time and generally enhance the resilience of Johannesburg’s energy system.
The city has faced mounting energy challenges over time, which include intense load shedding, rising electricity tariffs and constrained national generation capacity.
There have also been notable conflicts with Eskom over billing, which almost resulted in the city being cut off over billions of rands owed to the national utility.
All of these issues prompted the city to explore “diversified and locally anchored energy solutions”.
Sekwaila said the feasibility study demonstrates the city’s commitment to taking forward-looking steps to secure Johannesburg’s energy future.
“This feasibility study reflects the city’s obligation to explore sustainable energy solutions that can protect residents and businesses from ongoing supply disruptions and escalating costs,” he said.
“It is a prudent exercise aimed at understanding whether assets such as Kelvin Power Station and Egoli Gas can contribute meaningfully to Johannesburg’s long-term energy security.”
He stressed that any future decisions will be grounded in sound financial, technical and governance considerations.
Why Kelvin and Egoli Gas?
Kelvin Power Station, which has historically supplied base-load electricity to Johannesburg for more than seven decades, currently contributes approximately 10% of the city’s base-load electricity requirements.
Its proximity to major industrial and commercial hubs presents clear operational advantages, including reduced transmission losses and improved grid stability.
The city said that preliminary assessments have also indicated that electricity procured from Kelvin has historically been more cost-effective than bulk supply from Eskom.
This means that the acquisition could hold potential long-term value in securing greater strategic control over the asset, subject to the outcomes of the feasibility study.
Egoli Gas similarly represents a strategically important component of Johannesburg’s energy landscape, it said.
“Its extensive reticulated gas network supplies residential, commercial and industrial customers across the city.”
“Integrating gas infrastructure into the city’s broader energy planning could enable a more diversified
energy mix, support hybrid energy solutions for businesses, and contribute to future decarbonisation
efforts, including the potential transition to cleaner fuels over time.”
Notably, the potential acquisitions would be in addition to its other initiatives, such as the introduction of
Independent Power Producers (IPPs), the installation of solar microgrids, the rollout of solar photovoltaic systems, and the refurbishment of the John Ware Open Gas Turbine Substation.
Sekwaila reiterated that the process is firmly rooted in good governance, transparency and the public interest, repeating that “no acquisition decision has been taken at this stage”.
“The feasibility study will rigorously assess financial viability, funding options, regulatory and licensing requirements, environmental compliance, operational readiness and workforce implications,” he said.
The outcomes of the feasibility study, together with a detailed implementation roadmap and risk mitigation plan, will be reported back to the city’s governance structures for consideration.
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