City files suit to buy power directly

A COURT battle is looming between the City of Cape Town, the Department of Energy and the National Energy Regulator of South Africa (Nersa) after the City filed court papers demanding the right to purchase electricity from independent power producers.

The City filed court papers challenging Eskom’s exclusive right to procure electricity from independent power producers for resale, this includes electricity from renewable energy producers. In court papers, it states: “The City has until now purchased almost all of its electricity from Eskom.

“However, we want to diversify our sources of supply by contracting with one or more independent power producers (IPP) for the supply of renewable energy in the form of solar and wind-generated electricity.”

The papers also revealed that in November 2015, the City applied to the minister of energy for a determination that would allow it to purchase solar and wind power from an IPP. However, to date the minister had failed to determine the City’s application.

“The City will be able to provide an enabling environment within which local industry and job creation will flourish. The renewable energy industry represents the best opportunity in the energy sector,” its court papers state.

Brenda Martin, chief executive of SA Wind Energy Association, said: “Independent power producers have proven track records of building and commissioning renewable power plants on budget and on time.” Martin also said that the price for new independently produced renewable power has dropped significantly and is now 40% cheaper than coal. Eskom said their relationship with the City has gone unfazed since they filed the court papers.

“Eskom has a municipal bulk supply agreement with the City of Cape Town based on terms and conditions in line with the procurement of electricity sales, the relationship between Eskom and the City of Cape Town is extremely good.”

Nersa said it’s still studying the papers.

“Nersa is still going through the court papers served by the City of Cape Town,” said Nersa’s Charles Hlebela.

“A critical part of our climate change goals is energy security and making a greater contribution to reducing carbon emissions by introducing more renewables, such as solar and wind energy into our energy mix,” mayoral spokesperson Zara Nicholson said. Nicholson also added that the City intends making electricity more affordable over time.