Cape Town - The City of Cape Town is starting a programme to buy power from commercial and industrial producers who will be allowed to send power to the grid for cash in return.
This was announced today by mayor Geordin Hill-Lewis as part of the City’s journey to ending load-shedding and becoming energy secure.
“The City of Cape Town will now pay cash to small-scale embedded generation (SSEG) customers for the excess energy they produce and sell back to the City. In the past, these customers could only be compensated by means of credits on their municipal bills,” said the mayor.
In addition, these customers will now be permitted to sell more electricity to the City than they use. In the past, generating customers were required to be net consumers of the City’s energy. They will now be incentivised to become net producers.
“In this way, our residents will become crucial partners in ending load-shedding in Cape Town.”
“While these two policy changes will only apply to commercial and industrial customers, at first, the City intends to broaden this policy to all generating customers over time, including those with small residential solar PV installations. This step-by-step transition will ensure that we are able to get the largest projects — with the greatest capacity to positively impact on load shedding — online first and address any teething issues as they arise without putting strain on the City’s supply network.”
The City has been vocal that load shedding is the single-biggest economic issue facing South Africa. It is reported that Eskom’s Stage 6 load shedding this month cost the national economy R4,2 billion per day, and this lost value, according to the City, not only destroys businesses but has put the country on track to lose even more than the 125 000 jobs that load shedding destroyed in 2019 alone.
“We have a clear plan to fix this problem in Cape Town,” said the mayor. “The bid window for our first procurement of renewable power closed last month, and we are in the process of considering the bids and awarding the contracts. However, the process required by legislation in respect of these contracts is highly complex and time-consuming, which means it will take several years to make a serious impact on load shedding in the city.”
Sandra Dickson from lobby group Stop CoCT said the announcement is disappointing as the City of Cape Town now confirms its support to big business while residential ratepayers are left in limbo.
“Refunding net business producers of electricity in cash is a logical step as these users may never have to pay any money to the City of Cape Town. This will greatly assist to repay their high start-up costs to install their power-producing systems.”
She added that it would be interesting to see what this arrangement would do to the City's revenue stream for electricity.
“Is the City willing to share these projections with its ratepayers? The second policy change of allowing to sell off more electricity to the City than what is consumed by businesses is just an obvious outflow from the first policy change.”
STOP CoCT also decries the absence of consultation with homeowners and their exclusion from these policy changes.