Cape Town preparing for energy purchases from IPPs – Dan Plato

Mayor cautiously welcomes news that municipalities in good standing can buy energy from IPPs in future

City preparing for future energy purchases from independent power producers

14 February 2020 

The City has been putting pressure on 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. 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.

The City is a staunch proponent of more affordable, secure, cleaner and diversified energy sources.


1.    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.

We will then look at demand side management options such as ripple control, demand response measures such as aggregation of standby gensets (for standby power supply), solar water heating, etc.

2.     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 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. Clarity is now required in terms of roles and responsibilities.

The court case, set to be heard in May 2020, 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

3.    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.

4.     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.

5.     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.

     6. What other work has the City done while awaiting a National Government decision on diversification of energy supply?

We have been very busy proactively preparing for our new energy future.

-       We are developing a City IRP

-       We are in discussions with National Treasury on, among others, how to set up a future City Independent Power Purchase office

-       We are preparing for our court case to get legal clarity so that we can all move forward

Issued by Greg Wagner, Spokesperson to the Executive Mayor, 14 February 2020