HomeIndustry SectorsFinance and PolicySA city drafts own IRP as groundwork for IPP procurement

SA city drafts own IRP as groundwork for IPP procurement

During an online forum hosted by the Italian-South African Chamber of Trade and Industries, the City of Cape Town’s energy and climate change executive director, Kadri Nassiep stated that the city is preparing an IRP.

The City of Cape Town has contracted the Council for Scientific and Industrial Research (CSIR) to develop a mini- integrated resource plan (IRP). The document is anticipated to be completed within six to eight months.

The city has been vocal in its ambition for municipalities to procure electricity directly from independent power producers (IPPs) and to secure power through small distributed energy resources.

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Therefore, in compiling this IRP, the city aims to address guiding its future procurement decisions and actions in the IPP space.

Currently, legal and regulatory constraints prevent municipalities from procuring electricity directly from the IPP market. As such, Nassiep stressed that power procurement agreements with large-scale IPPs remained a key objective for the City.

According to the director, the City is working with National Treasury on a framework for a municipal-led renewables procurement programme. “We are proposing the establishment of a sustained, credible, planned and coordinated national procurement programme for municipalities that takes into account the national demand and supply options and constraints.”

However, Nassiep advised that it could take up to five years before the first IPP power procured by the municipality was integrated into the municipal network.

Mantashe’s section 34 ministerial determinations

During the online forum, Nassiep pointed out that the City of Cape Town is concerned that the Section 34 announcements still lists Eskom as the sole buyer. The announcement was made on 25 September, opening the way for the procurement of 11,813MW of new electricity capacity in line with the IRP2019.

Even though the City is concerned, Nassiep acknowledged that scope for municipal IPP procurement was likely to open up in future. This is in view of regulations on new generation capacity currently underway, which will allow municipalities to develop or procure own power generation.

The city wanted the right to procure from IPPs as part of a broader plan to diversify its electricity supply away from Eskom, as well as to reduce its carbon footprint and electricity costs over the medium to long term, stated Nassiep.

He added that in addition to IPP procurement, the City plans to develop its own renewable capacity through ground-mounted solar PV plants of between one and 10 megawatts.

According to the energy and climate change director, initiatives include energy efficient buildings and enhance the city’s embedded generation programme, whereby electricity can feed into the municipal grid.

Considering these plans, Nassiep noted that 70% of the supply will continue to be met by Eskom in the medium term.

Nicolette Pombo-van Zyl
Nicolette is the Editor of ESI Africa print journal, ESI-Africa.com and the annual African Power & Energy Elites. She is passionate about placing African countries on the international stage and is driven by the motto "The only way to predict the future is to create it". Join her in creating a sustainable future through articles and multimedia content.