South Africa’s major cities are in a race to launch alternative energy plans to reduce and eventually eliminate the load, as Eskom’s well-publicized problems look set to go unsolved for years.
It’s not just renewable energy they are after as a way to limit the impact of Eskom open shedding. Gas, solar, wind and better energy management feature prominently in the plan.
eThekwini Municipality, which includes the port city of Durban, is the latest metro in South Africa to announce large-scale renewable energy projects aimed at reducing the impact of load shedding.
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The National Treasury’s Technical Advisory Center last week gave the green light to the municipality’s plan to acquire 400 megawatts (MW) of new generation capacity, including 100MW of solar and 300MW of gas-to-power in 2025 and 2026.
“The procurement of 400MW will restore energy security, reduce the impact of load shedding, reduce dependence on the national grid, increase economic development and create job opportunities,” the eThekwini municipality said in a statement last week.
Many smaller municipalities – among them Orania, Mossel Bay, Stellenbosch, Overstrand, Saldanha Bay, Drakenstein and Swartland – have also announced plans to seek alternatives to Eskom’s power.
Win-win
The rush for renewable energy, while reducing the burden on citizens, has the other benefit of increasing the revenues of municipalities that are seriously affected by 2022 because of the 205 days of burden reduction that must be done.
In some municipalities, electricity sales account for 80% or more of revenue, while in Cape Town and Johannesburg electricity sales account for 32% and 25% of revenue, respectively.
Earlier this year, Joburg announced plans to secure 500MW of electricity, after issuing a request for proposals (RFP) for short-term power purchase agreements from independent power producers (IPPs). These RFPs last 36 months, although metros and municipalities are pushing for long-term contracts of the type recently completed by eThekwini.
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Joburg hopes to cut three stages of load shedding, while Cape Town’s more ambitious plan aims to cut four.
Joburg
Joburg plans to add 74MW of power by bringing back into service two gas-turbine plants, and save 85MW through the installation of a ripple-relay system that allows the city to cancel the disconnection of high-energy devices such as geysers.
A more 322MW will be saved through a better power control system using smart meters that will throttle instead of turning off power for households during peak demand times. Joburg gets 90% of its energy from Eskom, with the balance from Kelvin Power Station in Kempton Park.
The problem facing all metros is how to deal with peak hour demand in the morning and evening due to the relatively low availability factor of renewables.
Many metros are planning a combination of renewable energy, gas and solar to overcome the load crisis. For now, the plan will reduce the impact of load shedding because, for most municipalities, the inability to finish the grid is not realistic for the foreseeable future.
In his State of the Nation address in February, President Cyril Ramaphosa said reforms were underway to allow more private power generation, adding that there were more than 100 projects expected to provide 9 000MW of new capacity over time.
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“Some of the companies participating in the renewable energy program will soon enter construction and deliver a total of 2 800MW of new capacity,” Ramaphosa said.
Cape Town
The mayor of Cape Town Geordin Hill-Lewis said the city plans to stop opening in the next four years. In 2022, the tender for 200MW of renewable power from IPP, with an additional 60MW saved from better electricity demand control by rewarding residents for reducing demand at peak times.
The plan allows businesses and residents to generate their own electricity to sell back to the city for cash. Most recently, the city announced plans to acquire an additional 500MW from renewable energy providers and gas-to-power providers.
What is interesting in Cape Town’s case is that most of the power purchased from IPPs will be cheaper than Eskom power, but if battery storage is included, the cost will be higher.
This may not be a problem for many businesses and residents, who seem willing to pay a small premium to stop being open. Cape Town is also looking at the economics of upgrading the Steenbras hydro plant, which has been used to supply 180MW of clean power on demand.
Ekurhuleni and Nelson Mandela Bay
Also shrinking itself from the grid is Ekurhuleni in Gauteng’s East Rand region, which last year announced plans to acquire between 150MW and 680MW of renewable power from IPPs.
The city has installed rooftop solar panels on most metro-owned buildings and is encouraging places to do the same.
Not to be outdone, the Nelson Mandela Bay Municipality this month announced plans to build a R2.7 billion solar power plant as part of efforts to reduce the shedding load for local residents.
The first phase will start later this year and will add 150MW to the local grid, with plans to add 125MW later.
The city says it wants to buy 100MW more from IPPs in the city known for its wind and solar power.
Red tape … and Mantashe
eThekwini appears to have broken new ground for other municipalities navigating the energy production red tape that Ramaphosa has foresworn. It received approval from the Treasury Technical Advisory Center under the new procurement guidelines outlined in the Municipal Financial Management Act, which aims to provide guidance to municipalities acquiring new generation capacity.
Under the Electricity Regulation Act, Minister of Mineral Resources and Energy Gwede Mantashe is required to issue section 34 approvals for large-scale new power plants.
It remains to be seen whether this puts a crimp in the plans to roll out new power plants, although some metros seem ready to wave this aside and push on with their plans regardless.
This article originally appeared on Moneyweb and is republished with permission.
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