The City of Town says it will continue with its fight to be allowed to buy electricity from renewable energy independent power producers (IPPs).
This after the city was this week dealt a blow when the Pretoria High Court handed down judgement in the City of Cape Town’s case against the National Energy Regulator of South Africa (NERSA) and the minister of mineral resources and energy.
In the case, the city was seeking to develop its own clean electricity supply without requiring the minister’s permission.
However, Judge Leonie Windell postponed the case and sent the city, NERSA and the minister to try to resolve their differences out of court – failing which they could have the matter re-enrolled for hearing.
She also ruled the city had failed to follow a formal intergovernmental dispute process before litigating.
Assessing all available options
Responding to the ruling, alderman Dan Plato, executive mayor of the City of Cape Town, says the City of Cape Town maintains that local governments have the constitutional power to procure renewable energy, and will keep standing up for the rights of residents to live in a more energy-secure and future-fit city.
“We are assessing all available options following the North Gauteng High Court electing not to rule on the merits of our application challenging the applicability and constitutionality of the requirement in Section 34 of the Electricity Regulation Act that a ministerial determination is necessary before power may be procured from independent power producers.”
The city argues that approval from the minister of mineral resources and energy is not required to procure electricity from IPPs.
“In particular, we believe the constitutional obligation of municipalities to provide sustainable services supersedes Section 34 of the Electricity Regulation Act, and that this provision cannot obstruct a municipality’s obligation to provide the basic service of electricity to residents.”
“We are disappointed that the court elected not to rule on the merits of this matter, but instead refer the parties to intergovernmental dispute mechanisms for possible resolution,” he says.
For five long years, Plato says, the energy minister has failed to provide approval for Cape Town’s request to procure up to 30% of its power from cleaner energy IPPs.
The city, in 2017, sought a declaratory order from the North Gauteng High Court, having received no response from both the minister and NERSA for some years, he adds.
“The president, national government and the ruling ANC have all failed to create an energy-secure country, and have placed us all at risk through Eskom’s crumbling monopoly.”
Plato’s comments come after Eskom this week announced a new wave of load-shedding, leaving South Africans in the dark.
The power utility says there is a high possibility that stage two load-shedding may be escalated to stage three for the evening peak, and this constrained supply situation may persist throughout the weekend.
“We will keep standing up for residents and businesses whose livelihoods depend on a reliable energy supply,” Plato says.
“We will keep fighting for a more sustainable, climate-wise future, and residents can take heart that this journey continues toward the future that we want in Cape Town.”
To this end, the mayor says the city is engaging National Treasury on the development of a national municipal renewable energy procurement programme.
Recently, the city transferred a R54 million property for the development of the Atlantis Special Economic Zone, a central development in its growth as a greentech capital.
High time for municipalities
Meanwhile, the renewable energy industry has responded to the ruling, saying “it’s time for municipalities to begin procuring power directly from IPPs”.
Industry body the South African Wind Energy Association (SAWEA) says draft amendments to the Electricity Regulations Act on new generation capacity were published by mineral resources and energy minister Gwede Mantashe for public comment in May.
In a nutshell, SAWEA says the amendments are meant to pave the way for municipalities, with good financial standing, to be able to either develop or obtain their own power-generation capacity from IPPs.
“We still have several emerging questions that need to be addressed as the regulatory environment becomes more conducive for municipalities to procure power directly from IPPs,” says Ntombifuthi Ntuli, CEO of SAWEA.
“For once, we’d like to see a more favourable regulatory environment for the municipal sector in order to be an effective off-taker of renewable power.”
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