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City of Cape Town wants to buy electricity directly from Independent Power Producers (IPPs)

"We are doing everything possible to move away from sole reliance on Eskom for our energy needs, while at the same time trying to become more resilient and sustainable through the use of cleaner energy such as renewable energy..."

The city of Cape Town wants provisions to be put in place to allow municipalities to buy energy directly from Independent Power Producers (IPPs).

The city approached the courts in 2017 to challenge Eskom’s exclusive right to buy electricity from IPPs for resale.

Current regulations, allow municipalities to buy electricity directly from IPPs if they get ministerial approval.

The legal bid resurfaced after IPPs came are under the spotlight following the recent announcement by President Cyril Ramaphosa that Eskom will be split into three separate units.

Those who are for the unbundling argue that it will create a more cost-efficient system.

However trade unions argue that the proposed split will not solve Eskom’s governance and debt problems, but instead will lead to job losses.

Cape Town MMC for energy and climate change Phindile Maxiti said:

“We are doing everything possible to move away from sole reliance on Eskom for our energy needs, while at the same time trying to become more resilient and sustainable through the use of cleaner energy such as renewable energy and transitional fuels such as natural gas.”

According to Maxiti the city wants a section 34 determination in accordance with the New Generation Capacity Regulations in the Electricity Generation Act.

This will allow the procurement of up to 400 MW of renewable energy from IPPs.

He said buying renewable energy would reduce the long-term electricity costs for residents.

“The price for all renewables has fallen dramatically. For instance, wind energy is now far cheaper than new coal-fired generation,” he added.

More: businesslive

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