eThekwini’s plan to procure energy from independent power producers on track

The eThekwini Municipality says its plan to procure about 400??megawatts of electricity from independent power producers is forging ahead.

The City said the Municipal Independent Power Producer Procurement Programme (MIPPPP) was in the final stages of the concurrence process. It said it had obtained approval from the Department of Co-operative Governance and Traditional Affairs (Cogta) and Treasury to proceed with procurement of new generation capacity.

In addition, it said the KwaZulu-Natal Provincial Executive Council resolution resolved that applications for environmental impact assessments (EIAs) for Independent Power Producer (IPP) projects would be fast-tracked to ensure rapid development of the energy industry in KZN.

It was not immediately clear when the power might be available on the City’s grid. In a recent opinion piece, mayor Mxolisi Kaunda said the 400MW of alternative energy would include 300MW from gas and 100MW from solar in line with the City’s Energy Transition Policy.

“We have also started the final approval process in which we will be submitting the Section 34 Ministerial Determination to the Minister of Mineral Resources and Energy (DMRE).” Asked about the electricity needs of the City, the municipality said: “The energy requirements today are at 1??800MW, however, the city’s electricity consumption is starting to decline due to consumer preferences.

“We are starting to see small-scale embedded generation on industrial premises and at residential level. “This clearly shows that energy democracy is already happening. “Our energy system now and in the future, will guarantee the security of supply to residents and businesses. “The City is leading the energy transformation very well,” it said.

It said other energy infrastructure initiatives would be revealed at its energy transformation summit. The summit is set to take place from March 1 at the Durban ICC. It added that the additional 400MW will ease pressure and reduce the impact of stage 4 load shedding in the city.

The City of Cape Town has undergone a similar process to procure power from independent power producers. Asked about the process it had followed, councillor Beverley van Reenen, the City’s mayoral committee member for energy, said it was a complex process that was closely regulated.

“These programmes are done via competitive bidding processes in terms of the Preferential Procurement Policy Framework Act and all relevant public and municipal finance legislation and policies that guide the spending of public money. “It is a complex process. Tenderers will thus submit interest of bids and bid evaluation will take place and all due process followed until the award of the tender.’’

She said for Cape Town, it was likely to take until 2024/25 for the procured energy to start entering the City’s grid. She added that the City had been lobbying to be allowed to approach IPPs as far back as 2015. “Importantly, prior to national energy regulations being published approximately over the last year, municipalities were precluded from purchasing energy directly from Independent Power Producers.

“Our fight to procure energy from IPPs dates back to 2015, when the City of Cape Town wrote to the minister of energy requesting a Section 34 determination that would allow us to procure solar energy and wind energy from IPPs,” she said.