The Citizen (KZN)

City Power mulls cutting Eskom ties

ELECTRICIT­Y: PLAN TO CREATE OWN ENERGY CAPABILITY

- Tebogo Tshwane Cost of load shedding Outages Future energy mix

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.

 ?? Picture: Bloomberg ?? POWERED. To implement its power plan and clear its infrastruc­ture projects, City Power will explore alternativ­e financing agreements such as off-balance-sheet funding models and public-private partnershi­ps.
Picture: Bloomberg POWERED. To implement its power plan and clear its infrastruc­ture projects, City Power will explore alternativ­e financing agreements such as off-balance-sheet funding models and public-private partnershi­ps.

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