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City prepares for energy purchases from IPPs
 Image supplied by Scatec Solar.

Mayor of Cape Town, Dan Plato, on Friday cautiously welcomed the firmest commitment to date given by President Cyril Ramaphosa in his State of the Nation address that would enable municipalities to buy energy from independent producers (IPPs) in future.

“However, urgent clarity is required from national government on the legal and regulatory nuts and bolts of how this must happen,” Plato said in a statement.

“The City has been putting pressure on the national government for many years to reshape the energy regime in South Africa to the benefit of our people and businesses. Now we need urgent clarity from national government on the roles and responsibilities for municipalities and other stakeholders in terms of the New Generation Capacity Regulations in the Electricity Regulation Act,” he stated.

This is an important case for all stakeholders in the energy sector as legal clarification is required for the future purchase from IPPs to become a reality.

Plato clarified the following questions:

What sort of independent sources would the City look at?

The City will first need to complete a City-developed Integrated Resource Plan (IRP) to best optimise the supply and demand options. We are working with the Council for Scientific and Industrial Research about the production of such an IRP. We are also working with the Western Cape Government and GreenCape to look at several game-changers that, from an energy perspective, will greatly contribute to energy security of supply and ensure a transition to a lower-carbon future. For the supply side, we would consider all available and acceptable options at different stages of our future procurement. In principle, we’d look more toward renewable energy technologies that support a transition to a lower-carbon future.

What needs to happen for a new energy future to become a reality?

The current Electricity Regulation Act is the contentious act that allows the national minister of mineral resources and energy to prescribe the amount and type of new generation. We have contended that it is the City’s constitutional mandate to provide power to its customers, allowing those customers to choose the type of power they receive.

The current National Integrated Resource Plan and the issuing of a ministerial determination in favour of the municipalities will assist.

The court case, set to be heard in May, will ask the court for a declaratory order that sets aside the status quo and clarifies the legal responsibilities and parameters required for the power, so to speak, to be put back in the hands of municipalities.

What could the energy mix be in future?

The City-developed IRP will define this and will be in line with the City’s Integrated Development Plan and international commitments such as carbon neutrality of buildings by 2050.

When could we start actually seeing procurement happening?

It depends on the legal clarification and also the lead time to construction varies by technology type. At a minimum, if the decision is favourable, it will bring new power plants on line in three years’ time.

What are we working on in terms of energy equality for lower income households in terms of renewables?

We are undertaking a study to determine how best to overcome energy poverty, through various projects such as installing solar kits, solar home systems, increasing free basic electricity, improving access to gas, among others. Improving access to affordable electricity is a key deliverable that we are investigating at the moment.

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