GEORGE NEWS - The George Municipality's Electro-technical Services Department has a plan in place for buying electricity from independent power producers (IPPs), but electricity regulations need to change before this can happen.
This was confirmed by the department's acting director, Steyn van der Merwe, in response to a query from the newspaper regarding the recent signing off of ministerial determinations under Section 34 of the Electricity Regulation Act by Mineral Resources and Energy Minister Gwede Mantashe.
These new determinations allow only Eskom to buy electricity from IPPs.
"In effect nothing changes, because as a municipality we are still unable to procure electricity directly from an IPP without the minister's approval," said Van der Merwe. "George Municipality has conducted a baseline integrated resource plan for electricity with the CSIR in 2019 based on the least-cost scenario. This report will form the basis of decisions surrounding electricity procurement in the short term, if the regulations change."
Western Cape Economic Opportunities and Finance Minister David Maynier in a media statement welcomed the determinations that will build increased security in energy supplies. The determinations will result in 11 813MW of new electricity capacity for the country.
Maynier said ensuring that power purchase agreements are finalised is urgent so that projects can be brought onto the grid. "We look forward to the minister providing more clarity on when and how municipalities could also participate as purchasers of electricity where appropriate and not only Eskom, as has been the historical precedent."
Van der Merwe could not say how buying electricity directly from IPPs could benefit the municipality.
"Several factors such as the lack of a formal framework for how IPPs are to operate, the uncertainty around the procurement process to be followed, as well as the future status of Eskom make it difficult to predict if it would be beneficial or not," he said.
Power gap
Maynier referred to the CSIR's projection for a significant power capacity gap for South Africa. He said given that renewable energy and gas construction lead times are relatively short - 18 to 24 months - these technologies offer the quickest way to lessen losses to the economy due to load shedding, which is already estimated at R160-billion for 2020.
Such green infrastructure could provide an estimated R40-billion per year into the country's economy.
Government has promised to open a new bid window (bid window 5) during 2020 in the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). Maynier said he hoped this would be happening soon.
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