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City of Cape Town gearing up for battle to directly procure power from IPPs

17th November 2017 BY: Kim Cloete
Creamer Media Correspondent

The City of Cape Town says it is prepared for a legal battle with the National Energy Regulator of South Africa (Nersa) in a bid to directly procure power from independent power producers (IPPs).

This was the culmination of two years of trying to get permission, said City of Cape Town enterprise and investment director Lance Greyling.

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“We spent two years going back and forth with the former, former, former Energy Minister to get permission. We’ve been trying to engage the government for two years and are now taking this to a legal battle,” he told delegates attending the closing plenary of the yearly Windaba, in Cape Town.

Greyling said municipalities should no longer be seen as the bottom of the rung. He argued that the city should be able to procure power from an IPP without necessarily getting the Minister’s determination, and that the city would go to court to get a declaratory order to be able to do so.

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“We need to take the power back and build local resilience and keep our local economy thriving into the future.”

Greyling said he was awaiting a responding affidavit from Nersa and expected the matter to go to court in March.

“It may be appealed from the other side, and then may go to the Constitutional Court. It could be a lengthy process, but it is a process we are committed to going through.”

He said the city was not only thinking of itself with the move and wanted the system to change for all municipalities.

Greyling said IPPs had suffered following the government’s stalling in signing bid window four of the Renewable Energy Independent Power Producer Procurement Programme.

“We’ve seen companies build up in Atlantis. It’s become a real green economy hub. Yet some of those companies are now facing major financial stress and the prospect of laying off people because of the delays [in the signing of power purchase agreements].”

Greyling said the city needed to be far more in charge of its own future and not as dependent on government for both energy and water supply. 

“By rights, and in terms of their Constitutional mandate, national government should build bulk water supply augmentation such as dams and desalination plants. But we know they are bankrupt. We also know there is a water crisis and so we have taken it on to build desalination plants. It’s brought home to us that we cannot simply be dependent on national government,” Greyling told Engineering News Online.

Asked about criticism that the city woke up too late to the water crisis, Greyling said dams were 100% full in 2014. After two poor years of rainfall, and midway into a “shocking” rainfall season this year, it had made moves to counter the crisis through planning desalination plants.

“Our message to Capetonians is that whatever comes on line in terms of desalination plants will be a bonus. The question of whether we will be in time to avoid ‘Day Zero’ is dependent on what Capetonians consume from now until that date. The biggest security we have is to drive down demand.”

He said the city was doing what most cities did when faced with drought and water shortages, and that was to drive down demand through increasingly onerous restrictions. 

EDITED BY: Creamer Media Reporter
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