City Power mulls cutting Eskom ties
ELECTRICITY: PLAN TO CREATE OWN ENERGY CAPABILITY
Load shedding over the past three months cost the Joburg municipal utility close to R60m.
City Power, which distributes electricity to large parts of Johannesburg, is positioning itself to be less reliant on power supply from Eskom. To mitigate load shedding costs, City Power chief executive Lerato Setshedi recently said the municipal utility is exploring “load limiting through the [use of] smart meters, ripple relays, and [by] increasing generating capacity at Kelvin power station”.
According to its 2019/2020 business plan, City Power also has ambitions to create its own energy-generating capability.
Spokesperson Isaac Mangena said the city’s feasibility study on alternative electricity sources – including battery storage, rooftop solar energy, gas, and waste-to-energy – should conclude by month-end.
“The study will guide us on how much of which technology should we deploy at which site. This will be followed by procurement and implementation.”
Initially, the municipal utility had also wished to not renew its contract to buy power from Harith-owned Kelvin Power Station when it lapses in 2021.
But with the uncertainty of Eskom’s supply and to cater for the City’s developmental plans, negotiations are under way to extend the contract and increase Kelvin’s generation capacity to the maximum licence capacity of 600 megawatts.
“We see Kelvin as a strategic partner to reduce the overreliance on Eskom,” said Mangena.
The recent spell of load shedding between last October and this month resulted in City Power making losses of under R60 million as a result of having to restore substations and transformers that exploded when power returned, loss of equipment, and needing to pay technicians and operators overtime to ensure that electricity was restored after load shedding.
The loss in income from load shedding adds to the current financial pressures that City Power is experiencing due to illegal connections, billing errors, and changes in customer numbers.
In the year to 30 June 2019, the entity reported a net loss of R399 million (2018: R125 million loss).
“The impact of forced load reduction means interruption of supply to customers and loss of revenue,” the business plan reads.
Where the business plan speaks about photovoltaic (PV) generation, City Power explores three areas, the first being “prosumers” – consumers who have installed solar technology to generate power for self-use and can feed in any excess power into the distribution system.
“City Power is geared not just to enable these developments through a network connection but has gone further to develop a tariff which is intended at incentivising any excess power.”
Mangena said the target to implement the prosumer target is the next financial year which begins in July.
Secondly, City Power is also looking to invest in the PV space to build its own renewable energy production capacity. The benefits would be more competitive prices for electricity over time as the power generated would come at no cost.
Thirdly, its position on buying electricity from renewable independent power producers and away from Eskom’s fossil-fuelled electricity will be dependent on key factors such as the reliability of capacity and pricing.