Johannesburg council approves 20-year plan with independent power producers


By Neo Poho

The City of Johannesburg’s council has given approval for a plan to go into a 20-year deal with independent power producers (IPPs) for new generation capacity however, the plan has a lot of boxes that still need to be checked before it becomes a reality.

Hailed by the city's executives as groundbreaking, the plan to get the country’s largest metro and economic hub to cut the amount of energy it procures from Eskom by 5% in 2025 still has a long way to go, needing approval from the National Treasury, the National Energy Regulator of South Africa (Nersa), the Department of Cooperative Governance & Traditional Affairs, and the Department of Mineral Resources.

In addition to being subject to these approvals, the city has not yet completed any negotiations with IPPs around procurement, saying that it wants to make sure that it is negotiating tariff rates that are below Eskom’s.

City of Johannesburg's MMC for environment and infrastructure Jack Sekwaila has stated that the project is a long process that they are currently embarking on.

"A lot of investors are calling us on a daily basis telling us that they want to leave to Johannesburg mainly because of the issue of energy security in the city, they will tell you that look, we are burning too much diesel and it’s unaffordable and we are thinking of closing shop," Sekwaila said.

Last year, the city saw the short-term procurement of energy through a Short-Term Power Purchase Programme (STPPP) agreement from four IPPs, adding around 92MW to the city’s grid.

The MMC furthermore said that by 2030 to 2035, less than 60% of the city’s electricity will come from Eskom.

Additionally, City Power claims that it will have a slightly lower tariff for Johannesburg residents if it procures electricity from four independent power producers (IPPs).

City Power is also implementing a number of other initiatives to try and reduce the impact of load-shedding, these include installing rooftop solar at over 700 sites, installing high mast solar public street lights, and increasing the number of solar water heating systems.

Article Tags

Johannesburg Council

Eskom

Independent Power Producers

National Treasury

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