The electricity supplier to SA’s largest city has approved four bids from four private power producers to supply Johannesburg with 92MW.
The CEO of energy services company City Power, Tshifularo Mashava, said this would be almost enough power to spare Johannesburg from one stage of load-shedding.
For the city, each stage of load-shedding amounts to about 100MW of unmet demand. This means that for each 100MW of power supply that City Power can secure independently from Eskom supply, it can implement load-shedding at one stage less than the national load-shedding stage.
Ultimately, City Power, which is owned by the City of Johannesburg and is the main distributor of electricity in SA’s most populous metro, wants to acquire about 500MW of additional electricity supply from independent power producers (IPPs) by 2030. The four IPPs have been appointed under the short-term power purchase programme, which means their supply and purchase contracts with the city will be for three years.
The four successful bids, selected from 16 bids received by the city, include one waste-to-energy project (20MW), one gas-to-power project (31MW) and two solar power projects (41MW), member of the mayoral committee for environment, infrastructure and services Jack Sekwaila said. Final agreements with the IPPs were still pending and as such City Power could not yet put on record the names of the winning bidders.
To reach its target of 500MW by 2030 the city also planned to launch subsequent bidding rounds for longer-term projects.
Sekwaila and Mashava said good progress has been made in implementing a feed-in tariff structure to allow small-scale embedded generators — such as homes and businesses with rooftop solar installations — to feed electricity back into the grid for distribution by City Power.
“The SSEG [small-scale embedded generators programme] is part of the city’s plans to lessen the impact of load-shedding on residents,” Sekwaila said.
“The programme entails customer applications, registration, commissioning, installation of bidirectional metering to measure inflow and outflow of energy, and compensation to SSEGs through net billing,”
Municipalities derive a large share of their revenue from electricity sales. The Treasury and Eskom have been vocal about the risk that the rise in self-generation by households and businesses (who install rooftop solar and power backup system to secure their own electricity supply) poses to municipal revenue models.
However, Mashava said City Power is aware of the challenge and is in the process of repositioning itself as “more of a wires business than being in the business of electrons”.
“IPPs and SSEGs will still need to use our network system if they are going to be wheeling power across the network and that is a revenue stream for us.
“In addition, at the moment the demand for electrons exceeds what we can supply, so if we can get additional electricity from SSEGs to sell, it will also result in additional revenue,” Mashava said.
The City of Johannesburg’s plans to become more energy independent were first outlined at the Joburg Energy Indaba in May 2022 under former mayor Mpho Phalatse. This was after the City of Cape Town opened its doors to independent power producers, when mayor Geordin Hill-Lewis announced in February 2022 the city had opened the first round for independent entities to tender for providing up to 300MW of electricity from renewable sources.
Phalatse said at the time plans to stabilise electricity supply in Johannesburg would take eight years and cost R26bn.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.