Cape Town seeks urgent permission to buy renewable energy

Samuel Mungadze
By Samuel Mungadze, Africa editor
Johannesburg, 12 Dec 2019

The City of Cape Town is pressing ahead with demands that municipalities be allowed to buy renewable energy from independent power producers (IPPs) in accordance with the new generation capacity regulations in the Electricity Generation Act.

In a statement, the city’s acting executive mayor, Alderman Ian Neilson, says the city intends seeking permission from the Judge President of the Gauteng High Court for an expedited hearing on its energy case, asking the minister of energy and the National Energy Regulator of South Africa (NERSA) to allow it to buy energy from IPPs.

The original hearing date is scheduled for May 2020.

The city is fighting for the right to buy cleaner energy directly from IPPs and to improve energy security.

Neilson says this move comes as the energy crisis in SA has reached a new peak. The city’s legal team is liaising with the legal teams of the other parties to the matter with a view to approaching the Judge President with mutually agreeable dates for an earlier hearing.

Generation target

Reacting to Mantashe’s announcement that the process of purchasing energy from IPPs would now be expedited, Neilson says: “If the minister is serious about implementing immediate measures, he will agree to the city’s request to purchase energy from independent power producers.”

The City of Cape Town has set a target of generating 20% of its electricity from renewable energy by 2020.

In addition to trying to attract green investment into the province, it is working to obtain improved regulations related to small-scale embedded generation.

The Democratic Alliance-led Western Cape government, which also controls the city, has long been demanding that government allow it to procure renewable energy from IPPs.

It argues that the country’s outdated electricity regime forces the province to be wholly dependent on Eskom for energy requirements.

Now, the city says: “We need immediate action and minister Gwede Mantashe needs to show leadership and put the wellbeing of South Africans and our economy first.

“Minister Mantashe has had sufficient time to consider short and medium-term interventions and must now urgently engage with NERSA to implement them. One of the key interventions is to allow municipalities to procure up to 400MW of renewable energy from IPPs in accordance with the New Generation Capacity Regulations in the Electricity Generation Act.”

Further, it says, in terms of Section 34 of the Energy Regulation Act of 2006, the minister may, in consultation with NERSA, determine the types and quantity of electricity that is to be generated and the manner in which it may be sold.

“In light of the recent announcement by the Department of Mineral Resources and Energy, the city has written a letter to minister Mantashe, advising him of previous efforts to engage his predecessors and the city’s efforts to seek an order from the High Court on this matter.

“The city, furthermore, urges the minister to advise urgently whether he will consider our request for a determination, and if so, when he anticipates that we may receive an outcome to our application,” reads the statement.

Surprise call

On Tuesday, Mantashe made a surprise announcement that the fourth bid window for renewable energy projects by IPPs, which was signed last year, would be brought on-stream earlier.

Mantashe committed his department to developing adequate generation capacity to meet electricity demand, adding that this was an urgent and immediate task to ensure economic growth.

In a statement, the minister said he had considered short and medium-term interventions to both the electricity and energy challenges facing the country.

“These include, among others, publication of the request for information. The lead time for generation projects under normal circumstances is anything from 36 months onwards. The RFI will enable the department to have a sense of immediate generation options available (three to 12 months) to help fill the short-term gap,” reads the statement.

He added this would then enable the department to design an appropriate intervention in the immediate term, promulgate Section 34 determinations, and IPPs would bring Window 4 capacity on stream earlier. The department would also drive for the use of LPG gas.