The City of Johannesburg has approved a 20-year plan with independent power producers (IPPs) aimed at reducing the effects of load-shedding on its customers and businesses.
Johannesburg is the country’s largest metro and economic hub and contributes almost 20% to GDP. However, it is dogged by high unemployment, violent crime, crumbling infrastructure and the energy crisis, which has resulted in factories and small businesses closing shop and thus low revenue collection and economic growth.
The metro’s member of the mayoral committee (MMC) for environment infrastructure services, Jack Sekwaila, said the 20-year deal with IPPs was for new generation capacity.
The metro’s power utility, City Power, is mandated to provide electricity and energy supply in a sustainable manner promoting economic and social development.
City Power procures 87% of bulk electricity supply from Eskom and sources the rest from Kelvin Power Station.
According to the report tabled in council last week, City Power plans to reduce the amount of energy it procures from Eskom by 5% in 2025. In 2030, it plans to drop its reliance on Eskom from 87% to 66%.
It said that in 2035, City Power would only source 59% of electricity from Eskom and the rest would come from independent power producers.
“Through this long-term agreement of procuring energy through IPPs, the city — through its entity, City Power — will be on the right track towards achieving the goal of energy equality, energy independence, energy security, and energy supply,” said Sekwaila.
“These fundamental objectives will be realised at a lower price and little interruption as is currently the case with Eskom.”
He said the next step was to seek approval for the deal from the department of co-operative governance and traditional affairs, the Treasury, the department of mineral resources and energy and the National Energy Regulator.
These approvals, said Sekwaila, “will make way for City Power to finally get into a 20-year procurement deal with independent power producers. The nation’s energy crisis coupled with the ever-growing demand for electricity supply have hit City Power quite hard and have tempered with its ability to effectively generate adequate revenue, which is essential in delivering the mandate of economic and social development within the City of Joburg”.
City Power board chair Bonolo Ramokhele: “This groundbreaking development comes after we secured 92MW of power from four IPPs through a short-term power purchase [programme] agreement (STPPP) late last year.
“All this forms part of City Power's 10-point plan to lessen the impact of load-shedding on our customers, especially businesses that are the cornerstone of economic activity within the city. We have been consistent in our bias towards baseload dispatchable power through our efforts, to enable sustainable development of the economy.”
Ramokhele said the STPPP paved a way for the approval of the long-term deal. City Power’s 10-point plan to reduce load-shedding including sourcing power from solar farms, gas, battery storage, and waste-to-energy, among others.
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