Six Cape municipalities identified as most equip to develop own power generation
Cape Town - The six Western Cape municipalities identified to develop their own power generation projects were selected after an evaluation by the provincial government.
Finance and Economic Opportunities MEC David Maynier highlighted the Municipal Energy Resilience MER Project when he presented the province’s budget on Tuesday.
Maynier also pledged over R60 million to be allocated over the medium term to the province’s MER Project which would help municipalities across the Western Cape to understand the requirements of the new national energy regulations, and mitigate related risks as well as provide for network and operational capacity requirements for energy project development and procurement in municipalities.
“I announced that we will spend R48.8 million over the medium term and provide a further R20 million in the provincial reserves for the MER Project.”
Maynier said that he was pleased to announce that the six candidate municipalities participating in the first phase of the project in this financial year are:
- Drakenstein Municipality;
- Mossel Bay Municipality;
- Overstrand Municipality;
- Saldanha Bay Municipality;
- Stellenbosch Municipality; and
- Swartland Municipality.
Maynier added: “And, as they are a municipality that has already done excellent work on developing energy resilience, we are also pleased to be collaborating with the City of Cape Town on the MER Project.
“The MER Project is spearheaded by our Green Economy unit at the Department of Economic Development and Tourism, who are working in collaboration with the Department of Local Government and Provincial Treasury to enable the development of energy projects and engage with municipalities on multiple fronts,” he said.
He said that the procurement of energy at utility and municipal distribution scale, such as bulk energy purchases from Independent Power Producers (IPPs), under conditions of developing and evolving policies and regulations is a complex and challenging task.
“Municipalities may not have the policies, plans, resources, funding, or procurement expertise to procure wholesale electricity from sources other than Eskom, specifically IPPs.
“Neither have all municipalities’ electricity distribution systems been technically evaluated to clarify their readiness to support new electricity generation and energy trading,” Maynier said.
“To identify the candidate municipalities for the MER Project, we conducted a readiness evaluation to determine which municipalities were most equipped and met the conditions required to take advantage of the energy regulations to develop their own power generation projects and also procure power from IPPs.
“Now that the candidate municipalities have been announced, we will be confirming willingness and commitment through a Memorandum of Understanding, and then working closely with them in the first phase of MER Project to identify pioneering energy projects and develop a roadmap to roll out the projects,” the MEC said.
This process will consider multiple pioneering renewable energy technologies and scales, cost options, scale of investment required, location issues, risks, municipal readiness needs, infrastructure needs, timelines to get capacity onto the grid, transaction and procurement mechanisms and regulatory issues.
Maynier said that any learnings from projects implemented with the candidate municipalities will be applied to future projects in other municipalities.
“While this project should enable municipalities to be able to buffer residents and businesses from the impacts of load shedding, they will still continue to be connected to the national grid as we won’t be able to meet 100% of energy demand through renewable energy at this stage.
“We will also work closely with national government to explore how the new energy regulations could lead to renewable energy generation projects within municipalities in the Western Cape,” Maynier.
“The MER Project is just another example of how we are working hard to become more energy resilient in the Western Cape.
“Other projects that provide continued support to all municipalities in the Western Cape include support to develop and revise SSEG feed-in tariff frameworks and feed-in tariffs for solar PV, engagements with businesses to drive take-up of solar PV, support to municipalities to enable wheeling, support to energy sector businesses; the provision of energy technology and cost options to businesses and municipalities; and support to green economy investors in the Western Cape.”