Cape Town and Ekurhuleni are ready to generate their own power – but Tshwane can’t afford to

Earlier in May, minister of mineral resources and energy Gwede Mantashe released for public comment draft amendments to the electricity regulations that promise to give municipalities more freedom. This follows President Cyril Ramaphosa's 2020 State of The Nation Address, where he announced that municipalities will be allowed to make or buy power to provide electricity for their citizens, breaking Eskom's effective monopoly. Under the new plan municipalities must apply to “establish new generation capacity in accordance with the integrated resource plan”, and such an application should be accompanied by a detailed feasibility plan. Several cities say they are ready to generate their own electricity for consumers, but for at least one affordability is a problem.

The city of Ekurhuleni previously installed its own generation plants, including a landfill gas project and several rooftop PV plants. The next step is to produce its own electricity at scale.

“The plan is to procure some 680MW generated from the various [renewable energy] sources, mainly solar, [waste to electricity] etc," said the metro’s spokesperson Themba Gadebe.

This could mean cheaper electricity for consumers and huge savings for the city.

“Some electricity sources are showing a lower cost of generation as compared to grid electricity,” said Gadebe.

For many years, the city of Cape Town has been putting pressure on government to allow municipalities freedom to plan their own energy systems. It eventually took the government to court, in search of the right to procure energy from independent power producers.

According to Cape Town, the new draft regulations are still limited, in that they allow the minister to prescribe the quantity and type of generation a municipality may set up.

“The City contends it is its constitutional mandate to provide power to its customers, allowing those customers to choose the type of power they receive,” said Cape Town in a statement.

“The City’s contestation is that it does not require [the permission of the energy minister] but that it is free to generate and procure electricity in accordance with its statutory responsibilities to provide a secure electricity supply,” said the City’s executive mayor Dan Plato.

Although the battle continues, the city is confident, according to the mayoral committee member for energy and climate change Phindile Maxiti.

Tshwane, on the other hand, is in support of the new amended regulations but says it cannot use them due to “financial constraints”, said spokesperson Omogolo Taunyane-Mnguni.

However, the city said it hopes to eventually use waste-to-energy systems at its landfill sites to give residents a cheaper alternative energy source.

“It's an expensive endeavour. It is for this reason that the City has opted to go on [request for quotation] and conduct a due diligence study to determine the best model to pursue for the City’s unique supply and demand. 

“Once this process is complete, the City will then partner with investors to adopt a suitable modern technology,” said Taunyane-Mnguni.  

Source: https://www.businessinsider.co.za/municipalities-ready-to-buy-and-sell-electricity-2020-5