Durban - THE government’s plan to enable financially stable municipalities to buy power from independent producers (IPPs) will bring relief to business and consumers, eThekwini city manager Sipho Nzuza said.
Nzuza was commenting on President Cyril Ramaphosa’s announcement, during the State of the Nation Address that measures will be put in place for municipalities in good financial standing to buy electricity from independent producers.
“My personal view is that it is a great idea; anything that seeks to address load shedding, at a minimal cost, must be supported. We are one of the three municipalities where the presidency is piloting the District Development Model to address corruption, poverty, economic growth, unemployment, spatial planning and skills development,” he said.
The other participating pilot municipalities are OR Tambo District in the Eastern Cape and the Waterberg District in Limpopo.
During his address on Thursday, Ramaphosa said: “We will negotiate supplementary power purchase agreements to acquire additional capacity from existing wind and solar plants. We will also put in place measures to enable municipalities, in good financial standing, to procure their own power from independent power producers.”
Nigel Ward, president of the Durban Chamber of Commerce and Industry, said there is an urgent need to reform and diversify South Africa’s energy sector.
“We are pleased by President Ramaphosa’s announcement that the government will action crucial legislation that will enable the development of additional grid capacity from renewable energy and that municipalities in good financial standing will be allowed to procure their own power, from independent power producers,” he said.
IFP councillor Mdu Nkosi said: “It’s a good idea that municipalities source power from independent energy producers. That will enable municipalities to determine the price at which they want to sell power - and not Eskom. As you know, consumers have been complaining about the high prices charged by the parastatal.”
Once implemented, the scheme should be extended to small rural municipalities whose residents are the hardest hit by load shedding, said Nkosi.
“Think about the mortuaries and other businesses in those areas. We should also be on guard regarding how the tenders are awarded and who gets those tenders, because good projects don’t succeed because of tender fraud,” he said.
DA eThekwini caucus leader Nicole Graham said the City of Cape Town was taking Eskom to court, at the end of May to be allowed to do exactly what was now cleared by the president.
Energy analyst Ted Blom said: “Our government has been grappling with Eskom and electricity issues since 2001, and attempted to solve the problem through an unsuccessful effort to entice the private sector into building power stations, under a capped rate of return. There are questions around legislative amendments, and new IPPs are hurried through the regulatory minefield to obtain operating licences.”