Tug-of-war between Eskom and municipalities over power supply, Newsline

Cape Town – The green light given to independent power producers (IPPs) to provide 11800 megawatts of solar and wind power by Energy Minister Gwede Mantashe has started a tug-of-war between Eskom and municipalities that want to purchase electricity directly from the IPPs.

Mantashe’s gazetting of the section 34 ministerial determination for new generation capacity on Friday afternoon led to Finance and Economic Opportunities MEC David Maynier urging him to provide clarity on when and how municipalities in the Western Cape could become purchasers of electricity, replacing Eskom.

Last week, National Energy Regulator of SA (Nersa) spokesperson Charles Hlebela said: “The electricity may only be sold to Eskom Holdings SOC Limited, as the entity designated as the buyer, and only in accordance with the power purchase agreements and other project agreements to be concluded in the course of the procurement programmes.”

On Friday, Mantashe concurred with Nersa and said: “In consultation with Nersa, we have determined that new generation capacity is needed to be procured to contribute towards energy security. The electricity must be purchased by Eskom.”

However, Maynier said: “We look forward to the minister providing more clarity on when and how municipalities could also participate as purchasers of electricity where appropriate and not only Eskom, as has been the historical precedent.

“The Renewable Energy Independent Power Producer Procurement bid window 5 and subsequent bid windows would provide a pipeline of projects that would support development of the local supply chain and would not only support green infrastructure and green industrialisation, but also contribute to energy security, job-creation and economic growth in the province.”

ANC provincial Economic Opportunities spokesperson Nomi Nkondlo said: “The capacity of municipalities and role accorded to them in these projects is an important piece of the puzzle, especially considering the district development model that national government is pursuing.

“The return on investment must include improvement in the living conditions of citizens. Considering the strained fiscal positions of municipalities due to Covid-19, we are aware that this area requires a ‘business unusual’ approach lest we perpetuate uneven development among municipalities and punish our citizens.”

SA Wind Energy Association chief executive Ntombifuthi Ntuli said wind power directly benefited the parts of the country rich in wind resources.

“We have estimated that the roll out could attract R40 billion annually, which means that the sector will create direct jobs for the coming years in the various sectors of the economy,” Ntuli said.

“The Western Cape, in particular, will directly benefit from local jobs and the stimulus across the industry value chain directly linked to the Atlantis Green Technology special economic zone, which is at the province’s epicentre of green-tech activities.”

Cape Argus