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Blow for Cape Town’s bid to buy own renewable energy

Read time 3min 20sec

The Pretoria High Court has 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 seeks to develop its own clean electricity supply without requiring the minister’s permission.

Over the years, the City of Cape Town pressed 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 November last year, energy and mineral resources minister Gwede Mantashe had given the city some hope by giving the Western Cape the green light to explore IPPs for its future energy needs.

However, yesterday 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.

Click here to read to the full judgement.

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

However, Windell found the city had failed to follow a formal intergovernmental dispute process before litigating.

In September last year, the Centre for Environmental Rights (CER) was admitted as a friend of the court in a legal dispute over whether municipalities have the power to procure electricity without permission from the minister of mineral resources and energy.

Commenting on the ruling, CER attorney Nicole Loser says: “Resolving the standoff about electricity generation is important and urgent because government is failing to deliver clean, affordable, reliable electricity to all South Africans.

“Eskom’s coal fleet is unable to meet the country’s power demands even in this severely depressed economy. South Africans need the minister, NERSA and local government to work fast to resolve their differences and find the cleanest and least expensive ways to keep the lights on.”

According to CER, recent research by the Council for Scientific and Industrial Research indicates SA will not have enough generating capacity to meet demand for up to five years, meaning years of load-shedding risk with an estimated R60 billion to R120 billion economic cost.

How bad it is depends on decisions that are made now, it notes.

CER joined the case as a friend of the court (amicus curiae) in 2019 to bring to the court’s attention the constitutional obligations of local government to protect the environment, including people’s health and well-being.

In court, CER argued that local government’s duty is both to provide affordable and accessible electricity services and to provide electricity without giving rise to harmful and avoidable air and water pollution and climate change.

It notes that to the extent that local government intends to generate clean and affordable electricity capacity (which would be aligned with its constitutional obligations), national government must support and facilitate local government electricity generation.

South Africa’s coal-dominated electricity system makes it Africa’s worst greenhouse gas emitter, says CER, adding that air pollution from Eskom's coal-fired power fleet causes thousands of premature South African deaths annually, has severe negative impacts for the health, well-being and development of children, and makes many more people too sick to work.

“Every day that government delays is another day of load-shedding,” says Loser. “Government's energy policies are opaque and ambiguous, and it shows no credible sign of delivering a just energy transition.”

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