State of the Nation Address: Mayor asks President to signal commitment to support Cape Town’s work to end load-shedding
10 February 2022
I have written to President Cyril Ramaphosa to ask him to use his State of the Nation Address (SONA) to signal that his government is committed to helping municipalities end load-shedding over time by facilitating progress, rather than delaying it through legislation.
This year’s SONA is due to take place in the same week as Eskom’s latest round of load-shedding. It is the ideal opportunity for the President to signal his commitment to prioritising energy security in South Africa.
The City of Cape Town is ready to begin procuring energy from independent power producers, which will enable us to provide more reliable and more affordable energy to Capetonians. Our tender documents are ready for publication, and our planning regarding self-generation projects is in place. We are ready to start putting an end to load-shedding in Cape Town.
The national government, however, has left several important regulatory issues unresolved and unclarified. These regulatory snags have introduced unnecessary risks and obstacles that have the potential to delay our IPP procurement processes and self-generation projects if left unaddressed.
One issue that I specifically brought to the President’s attention is the lack of clarity on whether a ministerial determination in terms of s34 of the Electricity Regulation Act will be required in respect of the City’s power purchase agreements and the City’s own planned generation projects.
If Minister Mantashe has an effective right to veto our power procurement projects, the resultant risk may deter potential IPP partners from making preparations to enter these contracts. This is not to mention the significant delays of months (and often years) that occur when approvals are required from the Department of Mineral Resources and Energy.
Capetonians cannot afford to wait any longer for reliable and affordable electricity. South Africa’s energy insecurity is an urgent economic crisis.
Load-shedding costs the national economy an estimated R500 million per stage, per day. Last week’s blackouts alone amounted to at least R6 billion in value being wiped out from our economy. To put this in concrete terms, this amount could have paid around 460 000 South Africans the national median monthly salary of R13 044. With rising poverty and an unemployment rate now sitting at 46.6%, energy security is a pressing social justice issue.
President Ramaphosa could easily commit his government to an interpretation of the legislation that will make a s34 ministerial determination unnecessary. This small signal will carry far-reaching, positive consequences for the nation’s energy security.
Energy security means businesses succeeding. Energy security means more jobs. Energy security means meaningful economic recovery and growth. In his SONA, I hope the President will prove his commitment to the progressive, poverty-ending goal of energy security.
Issued by Media Office, City of Cape Town, 10 February 2022
