Johannesburg is following the example of Cape Town to reduce its reliance on Eskom, whose load-shedding has been going on for 15 years, costing the country billions of rand in lost economic activity.
But this will not happen overnight and it will not be cheap, mayor Mpho Phalatse said at Joburg’s first Energy Indaba on Monday.
Phalatse, who also spoke to Business Day on the sidelines of the conference, said Johannesburg had to position itself to become more energy independent. To end load-shedding, it will have to acquire about 500MW of additional electricity supply from independent power producers.
The City of Cape Town was the first municipality to open its doors to independent power providers, when mayor Geordin Hill-Lewis announced in February that the city had opened the first round for independent entities to tender for providing up to 300MW of electricity from renewable sources.
Home to 6-million residents, Joburg contributes about 15% of the country’s GDP. Load-shedding has an exaggerated effect on the city, given its importance to SA’s economy. For Johannesburg, the economic effect of stage 2 load-shedding is equal to stage 4 in the rest of the country, according to Michael Sun, the MMC for environment & infrastructure services.
Phalatse said energy services company City Power, which is owned by the City of Johannesburg and is the main distributor of electricity for SA’s biggest city, had put together a plan that will stabilise electricity supply. But implementing this plan would cost R26bn and take eight years.
The city’s “total capital budget for the next financial year is R7.7bn; that includes [money to be spent] on electricity, water, and road infrastructure as well as various other programmes. There is no way that we as a city alone can turn around the energy-supply situation in Johannesburg,” she said.
According to Phalatse, in the past, the municipality was reluctant to consider allowing private sector players to participate in the energy market alongside City Power because it was “afraid to let go of the revenue stream that generated much of the [city’s] income” by selling electricity to residents at a profit.
This would need to change, she said, because the city would have to team up with the private sector to raise money needed to stabilise energy supply.
“We don’t have the funding to keep up with the investment required in new infrastructure, so we need to look at public-
private partnerships.”
She said: “City Power is open for business. Joburg already gets 10% of its energy from the Kelvin power plant, which is a private entity. We want to emulate this as we advance our energy mix.”
The request for proposals from independent power producers will be issued “almost immediately after the Joburg Energy Indaba” for the city to solicit bids for power projects from the market.
The timeline for implementing alternative energy solutions will vary from one project to the next, but Phalatse wants to bring the first new projects online within 24 months.
Solar installations
Apart from teaming up with independent renewable energy producers, another solution that Phalatse said the city wanted to consider was to better integrate electricity generated by households that had rooftop solar installations into the city’s energy supply.
In addition, it would look at projects aimed at expanding the city’s piped gas infrastructure beyond that available to the industrial sector and certain residential customers through Egoli Gas and Sasol’s existing networks.
“The lack of gas infrastructure has made it impossible for gas to serve as an energy carrier that can replace the use of electricity in cooking and heating, but to expand the gas market to more residential users would require considerable infrastructure investment,” she said.
The city also wants to partner with the private sector on implementing new solutions that could curb vandalism and theft.
Sun said that City Power had been experiencing “shocking monthly increases in theft and vandalism”.
City Power recorded 1,770 cases of cable theft and vandalism in the current financial year. During the same period,
it suffered direct losses of about R23m.
These figures exclude indirect losses such as revenue losses due to unserved energy, and the economic effect on customers and businesses, Phalatse told Business Day.
Sun said: “We have spent R150m on the protection of infrastructure. This is money that could have been used to provide better services for the residents of Johannesburg.”
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