The City of Cape Town says its policy to pay cash to small-scale embedded generation customers for the excess energy they produce and sell back to the metro will initially only apply to commercial and industrial customers.
This as the city’s drive to reduce its reliance on Eskom’s gathers momentum. In the past, these customers could only be compensated by means of credits on their municipal bills, Cape Town mayor Geordin Hill-Lewis said on Monday.
“In addition, these customers will now be permitted to sell more electricity to the city than they use. In the past, generating customers were required to be net consumers of the city’s energy; they will now be incentivised to become net producers. In this way, our residents will become crucial partners in ending load-shedding in Cape Town,” Hill-Lewis said during an engagement with the city’s business community.
“This step-by-step transition will ensure that we are able to get the largest projects — with the greatest capacity to positively impact on load-shedding — online first, and address any teething issues as they arise without putting strain on the city’s supply network,” he said.
“Small-scale embedded generation customers — particularly commercial and industrial generators with significant amounts of roof space available for solar PV generation — are a source of energy for the city that can be brought online even before IPPs [independent power producers].”
Cape Town is aiming to become the first load-shedding free city in SA and has plans in place to buy power from IPPs, with tenders to procure at least 300MW of additional renewable energy already in the pipeline.
Amended regulations on new generation capacity, which were gazetted by mineral resources & energy minister Gwede Mantashe late in 2020, enable SA municipalities in good standing to develop their own power generation projects. The state has been under pressure to open up the energy sector to allow more players in the market to boost power supply, which is desperately needed to fire up the economy as ailing power utility Eskom struggles to keep the lights on.
Hill-Lewis said that while policy changes around the procurement of additional power will only apply to commercial and industrial customers at first, the city intends to broaden this policy to all generating customers over time, including those with small residential solar PV installations.
He highlighted that load-shedding is the single-biggest economic issue facing SA, with Eskom’s stage 6 load-shedding this month costing the national economy R4.2bn per day.
“This lost value not only destroys businesses but has put the country on track to lose even more than the 125,000 jobs that load-shedding destroyed in 2019 alone.
“We have a clear plan to fix this problem in Cape Town. The bid window for our first procurement of renewable power closed last month and we are in the process of considering the bids and awarding the contracts.”
Hill-Lewis said, however, the process required by legislation in respect of these contracts is complex and time-consuming, which means it will take several years to make a serious impact on load-shedding in the city.
Updated: July 25 2022
This article has been updated with additional information.
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