COJ sets sights on renewables as Eskom drops the ball

The City of Johannesburg (COJ) is planning to wean itself from troubled power utility Eskom.

Yesterday, executive mayor councillor Mpho Moerane launched an energy mix “Energy Sustainability Strategy” for the municipality, in a bid to accelerate security of reliable power supply for residents and business.

This as state-owned company Eskom is struggling to keep the lights on. This week, the parastatal announced that due to a shortage of generation capacity, stage two load-shedding will be implemented from Tuesday until Saturday.

With Eskom on the back foot, COJ seeks to increase its capacity to cater for its growing developmental needs. The new strategy will see an extra 500MW capacity of alternative energy added to the city, using gas and solar sources.

City Power currently receives 90% of its electricity from Eskom and 10% from the Kelvin Power Station, an independent power producer (IPP) that recently signed a power purchase agreement with the city.

Moerane said the city was exploring taking over Eskom-supplied areas in Johannesburg, which include Sandton and Soweto.

“I am pleased we are finally unveiling the 15-year Energy Sustainability Strategy that will see City Power transitioning from an electricity distribution company to an energy service provider,” he said.

“This means City Power is set to be a ‘wires business’ that will not only continue delivering conventional power, but will also cover distributed energy generation and energy storage facilities as its core business.”

The mayor noted the strategy is not an overnight standalone initiative, but a long-term plan aligned with the Joburg Growth and Development Strategy – the GDS 2040.

“It is also in sync with our Climate Action Plan, which aims to ensure that by 2030, at least 35% of electricity generated in the city is from clean energy sources. The strategy is the much-anticipated vehicle that is ready to deliver us to the 2030 target of 35% electricity from clean energy sources.”

COJ notes the new alternative energy-mix strategy will kick-start by the end of this week, with the issuing of an official public request for proposals from independent power producers.

It will incorporate an alternative energy mix that includes:

• 200MW of electricity from photovoltaic farms and rooftop suppliers.
• 200MW of private photovoltaic electricity generation on the grid through wheeling and trading with customers.
• 50MW of gas-powered electricity generation.
• 25MW capacity from waste to energy in the Robinson Deep Landfill site.

COJ says this puts the city on a path to secure the targeted 35% of electricity supply in Johannesburg from renewable and cleaner sources of energy by 2030.

“This means the city is set to reduce our reliance for generating capacity on the national power utility by up to 15%, and thereby minimising the chances of Eskom-scheduled load-shedding. I can say without contradiction that the added alternative sources’ capacity will exempt Johannesburg from load-shedding in the near future,” Moerane said.

Over and above the quick wins brought about by the strategy, the city is also actively looking for other innovative ways, including the use of the grid by customers who will be billed and the construction of power plants of up to 100MW as provided for in the amendment of Schedule 2 of the Electricity Regulation Act.

City Power has embarked on 14 key projects around the realisation of a cleaner energy generation mix budgeted at about R10 billion, which are also in line with the approved Integrated Resource Plan (IRP), National Development Plan and the city’s energy strategy, says COJ.

Councillor Tania Oldjohn, MMC for the Environment Infrastructure Services Department in COJ, said the new energy mix strategy will ensure everyone including the poor in the city have affordable power.

“As a government, we have a responsibility to ensure every citizen of this city has access to reliable electricity. With our developmental and economic growth plans, we cannot afford power interruptions,” said Oldjohn.

“With the path we are taking, we are able to reduce over-reliance on Eskom, particularly since it has proven to be unreliable when it comes to energy supply. Ultimately, this will help make Johannesburg‘s economy function at its maximum, create jobs and make our city safe,” she added.

Meanwhile, Jason van der Poel, partner at Webber Wentzel, notes that amendments to the Electricity Regulations on New Generation Capacity, 2011, were made on 16 October 2020.

“Up to this point, only organs of state active in the energy sector were permitted to procure new generation capacity. As a result of the amendments, municipalities may apply to the minister for the procurement or purchase of new generation capacity in accordance with the IRP 2019.

“To do so, municipalities must submit a feasibility study; prove they have complied with the Municipal Finance Management Act (MFMA) and the Municipal Public-Private Partnership Regulations; and submit proof that the application is aligned with their Integrated Development Plan.”

He notes the conclusion of power purchase agreements between buyers or procurers and IPPs will also be subject to any approvals required by the MFMA or Municipal Systems Act, together with the Public Finance Management Act.

Today, the power utility announced that due to further shortage of generation capacity, “Eskom regrets to announce that stage four load-shedding will be implemented from 12:00 today until 05:00 on Friday. Thereafter, stage two load-shedding will be implemented until 05:00 on Saturday.”

According to Eskom, over the past 24 hours, a unit each at Medupi, Kusile and Matla power stations tripped, while a unit each at Lethabo and Arnot power stations were forced to shut down. This constrained the power system further, requiring extensive use of emergency reserves, and therefore, hampering the recovery of these reserves.