Local election fever has arrived in South Africa. Political party posters are going up, candidates are campaigning, and the population is readying itself to elect their municipal councillors.
Of the 278 municipalities (comprising eight metropolitans, 44 districts and 226 local municipalities) sprawled across the country’s nine provinces, only a few are performing well.
Revenue collection is low with high levels of non-payment for municipal services. Consumers – including households, businesses, and the government – currently owe about R231 billion for services delivered. Sadly, only R37 billion is realistically collectable.
While an independent report released by Ratings Afrika found the best performing municipalities are in the Western Cape (with an average of 59 points), it’s not all rosy for the province, with Beaufort West scoring 18 out of 100.
The second and third-highest scoring provinces are KwaZulu-Natal (averaging 39 points) and the Northern Cape (averaging 33 points).
One view is that reports like the Municipal Financial Stability Index are critical weathervanes indicating the ability of a municipality to provide services. Another is to put these aside as not a true reflection of what is happening on the ground.
Regardless of your standing on such reports, the system appears broken.
This Index looked at how municipalities manage their money and how this impacts service delivery in their areas. Encompassing all levels of services from electricity to waste removal, it is instead a Catch-22. How do municipalities deliver on services when consumers don’t pay, and why should consumers pay for services that aren’t provided?
Municipal energy resilience
One area of service delivery is not entirely in the hands of the municipality. They rely on Eskom to generate energy and evacuate the power across the country. However, once it reaches the distribution level, it is in their remit to supply households, businesses, and government offices with a reliable electricity connection.
Unless, of course, Eskom announces loadshedding, forcing municipalities to cut power to their consumers.
This dance with Eskom is about to change.
The 100MW threshold increase will deliver so much more power into the network from outside the Eskom playground. Whoever owns and operates a 100MW power system can supply electricity to tens of thousands of households through the municipality.
Trailing ahead, the Western Cape doesn’t want to lose its advantage and launched its Municipal Energy Resilience (MER) Project. The aim is to assist the region’s municipalities in taking advantage of this new energy regulation, including purchasing energy directly from IPPs.
The MER Project will help municipalities understand the requirements of the new national energy regulations, mitigate related risks, and provide for network and operational capacity requirements for energy project development and procurement.
Phase 1 involves the identification of potential candidate municipalities and pioneering projects and the development of a roadmap for rolling these out.
The preparatory work is extensive. The MER project will explore renewable energy technologies and plant sizes, cost options, the 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 matters.
Phase 2 will focus on implementing the pioneering energy projects in the identified candidate municipalities and working with municipalities to help fill gaps to enable future energy project implementation.
Phase 3 will see a master plan for energy projects to be rolled out in municipalities and the commencement of energy projects in other municipalities as the budget allows.
The journey is arduous but worthwhile in positioning municipalities to be highly service-focused and resilient against future risks.
It is a topic of discussion at the upcoming Enlit Africa Digital Event on 26-27 October 2021 to which you are invited.
Meanwhile, in the Gauteng province, another option to support municipal resilience is underway. The Premier and the Mayor signed a power purchase agreement with Kelvin Power Station in which the utility City Power will receive up to 180MW from the power plant.
This quick-fix will support the area during loadshedding but is not a long-term solution.
Until next week.
Editor, ESI Africa
PS – Last week, we took a small step to normality. I am excited to share these images of the ESI Africa journal at two in-person events. The magazine and our African Power & Energy Elites yearbook were made available to attendees.
Unfortunately, we didn’t have enough on-site for everyone. So, if you would like a copy please do reach out to us now.