GCX Newsletter, Adam Green, 5 June, 2017
City and provincial administrations in South Africa increasingly want to have the freedom and independence to procure clean energy directly, independent of what Eskom can offer. The City of Cape Town is leading the charge.
Mayor Patricia de Lille, in April, confirmed the city’s intention to forge ahead by taking the Minister of Energy to court for the right to procure energy directly from suppliers.
The renewable industry has ground to a halt with Eskom’s continued delays in signing off on preferred bid winners from previous rounds of the Independent Power Producer Programme (IPPP), despite continued promises by Government to the contrary. To date, Eskom has signed 64 PPAs (power purchase agreements) for a total of 4 000MW. In addition to the signed PPAs, there are 37 PPAs remaining to be signed. It was expected that new energy minister Mmamoloko Kubayi would sign the outstanding contracts in April 2017, however, her office asked that the signing be delayed yet again. These 37 projects represent a total investment of R50 billion, 13 000 jobs in construction and a further 2 000 permanent jobs over the 20-year lifetime of the projects.
With economic growth at a virtual standstill, local economies are not waiting for Government, but taking the lead by creating opportunities and investment under the Green Economy. IPPP has been one of the key economic successes in SA since its launch in 2011. Provinces have taken notice and want to boost local economies by pursuing their own power generation. Benefits include job creation, both direct and indirect, creating new local industries within the energy sector and downstream businesses (parts, training, maintenance, accommodation etc). Independent power producers are required to provide jobs and to share ownership with local communities, and also to fund social projects in the surrounding community. By June 2016, R216 million has been spent on social-economic development since November 2013, and a total of R9.2 billion has been committed to the 64 active projects over their 20 year lifetimes…
… The City of Cape Town is preparing to take legal action against the energy minister over where it receives its electricity supply from. This legal action will be closely watched by city administrations across South Africa.