Finance and Economic Development

Introduction

Through the Standing Committee held on 6 March 2020, the Department of Economic Development and Tourism was asked to ‘provide the by-laws of the 23 municipalities that are allowing small-scale embedded generation and the approved feed-in tariffs of the 19 municipalities for small-scale embedded generation’.

Broad outline of support DEDAT provides to Western Cape municipalities

The Green Economy unit of SEAD in DEDAT manages the Green Economy Ecosystems Support programme. This cluster support work is implemented by Greencape, working closely with municipalities, industry and investors in many sectors of the green economy, including energy, which includes the electricity sector. GreenCape runs sector desks for renewable energy, energy services, water and waste that undertake: engagements with industry through one-on-one meetings, industry gatherings, presentations to industry associations; gathering, packaging & dissemination of green economy market intelligence; and engagement with policy makers & regulatory authorities (including municipalities) to address regulatory barriers to market development (incl. policy, industry standards).

The Green Economy Ecosystems support programme includes the Smartgrids project. One of the Smartgrids project’s focus is on further enabling municipalities to support SSEG (Small Scale Embedded Generation). This included support for and municipal engagements in the following areas, with the latest deliverables expected at the end of February 2020:

• Support the development of tariff design, as well as grid connection rules and regulations for municipalities
• A total of 24 municipalities allowing SSEG
  • 1 Metropolitan municipality (City of Cape Town)
  • 23 (out of 24) local municipalities
• A total of 20 municipalities having completed policies (by-law, framework – rules and regulations) that allow SSEG (including rooftop solar PV).
• 19 of these municipalities having NERSA tariff structure approval (with a further two municipalities in the approval process).
• A high level renewable energy policy developed for George and Stellenbosch municipalities
• Progress made on development of wheeling frameworks at Stellenbosch and Drakenstein municipalities.

Progress in implementing SSEG in Western Cape municipalities:

The map below indicates the progress of Western Cape municipalities in enabling SSEG.

Current details of SSEG and feed-in tariffs in Western Cape municipalities

The development and approval of SSEG by-laws and policies are the responsibility of each municipality. These have now been developed for 24 Western Cape municipalities (including for the City of Cape Town).  We do not have copies of each of the policies and as translated into by-laws, but will endeavour to collate these from the 2020/21 financial year.

The standard SSEG policy that is used as the basis for working with and supporting the municipality in developing their own is attached as Annexure A:

• Small-Scale Embedded Generation Policy
• Guide to connection of small scale embedded generation to a municipal distribution system: electricity supply by-law and policy requirements

Attached as Annexure B is a spreadsheet detailing the NERSA-approved tariff structure, including the SSEG tariff structure for each of the following 16 municipalities:

1. Beaufort West
2. Breede Valley
3. Cape Agulhas
4. Cape Town
5. Cederberg
6. Drakenstein
7. George
8. Hessequa
9. Knysna
10. Langeberg
11. Mossel Bay
12. Oudtshoorn
13. Overstrand
14. Saldanha Bay
15. Stellenbosch
16. Theewaterskloof

The tariffs are shown in customer categories as applicable for each municipality:

1. Residential
2. Commercial
3. Industrial
4. Agricultural

Furthermore, the tariff of each customer category is shown in cost category, as applicable for each:

1. Fixed Charges
2. Export Tariff
3. Import tariff

A detailed tariff analysis between municipalities has not been done to date. Note that direct tariff comparison between different municipalities is a challenge. The tariffs for each municipality will vary across the applicable customer segments and types, type of cost categories and rates dependent on fixed time rates, seasonal rates and time of use (as appropriate).

Annexure A:

A1: Small-Scale Embedded Generation Policy

A2: Guide to connection of small scale embedded generation to a municipal distribution system: electricity supply by-law and policy requirements.

Annexure B:

SSEG Tariffs breakdown 19_20