Premier

I have been informed by the Department of Economic Development and Tourism as follows:

[1] Load shedding costs to the economy have been calculated by several different organizations. The methodology that tends to be used the most often is the Eskom methodology that was approved by NERSA. This calculated in 2020 that the national total effect was R101.73 /kWh and the direct effect was R29.05 /kWh – this is the so-called cost of unserved energy. Using these numbers the impact of load shedding was previously calculated to be around R75 million per stage per day for the Western Cape.

This was however calculated at a time when load shedding had not reached the levels recently reached. When load shedding is consistently at level 4 and higher, it is much more damaging as companies with continuous processes are interrupted and this might mean that output drops to zero. A recent article calculated the cost of stage 6 load shedding to the South African economy as over R4 billion per day^[1]. If translated to 12% of SA (as per consumption), then the cost to the Western Cape economy is approximately R500 million per day. There are no current estimates of cost specifically for small businesses^[2].

[2]   This question specifically relates to the City of Cape Town and not the province. Below is however information relating to the work the City of Cape Town is doing to secure Cape Town’s energy future:

The City of Cape Town [CoCT] currently utilises its hydropower storage facility to offset load shedding where possible. Between January and May 2022, the city protected its customers through the use of the Steenbras Hydro Pump Station with one stage of load shedding, amounting to roughly 514 hours, or 21 days of protection^[3]. Additionally, the Mayor of the City of Cape Town has recently released a statement on a 10-point plan to end load shedding^[4].  The City of Cape Town has been taking a multi-pronged approach towards securing its energy future; refer to the slide below^[5] as well as additional points raised below.

 

1. Large-scale procurement

On large-scale procurement, the City of Cape Town has embarked on a tender process to secure Transaction Advisory Support which has just closed on 14 July 2022. The large-scale procurement is expected to follow the Small Scale IPP procurement RFP that the City released in February 2022.

2. Small Scale IPP Procurement

On Small Scale IPP Procurement, the City of Cape Town has embarked on a Request for Proposals (RFP) for Independent Power Producers (IPPs) that would connect to the City of Cape Town’s electricity network following various stages of a tender process. An indicative date of contract award is 31 December 2023.

3. 1-10 MW City-owned Generation

The City of Cape Town is currently developing a Renewable Energy project of up to 10 MW in Atlantis. Construction on the Atlantis project is anticipated in the latter half of 2022^[6].

4. <1 MW City Generation

The City of Cape Town is taking a phased approach to delivering projects identified under the City-owned Small Scale Embedded Generation (SSEG) programme. The first phase of the rollout of this programme will entail the installation of the following facilities:

• Rooftop solar PV system at the Gugulethu Electricity Depot
• The ground-mounted solar PV system at the Kraaifontein Wastewater Treatment Plant
• The rooftop solar PV system at the Transport Management Centre (TMC), Goodwood^[7]

The City of Cape Town has also implemented a floating solar PV project at its Kraaifontein Waste Water Treatment facility, comprising of 3.51 kWp floating and 3.51 kWp ground-mounted panels^[8].

5. Wheeling

Engagement with many large power users on the network has indicated that electricity wheeling [where private users pay a fee to use the City’s network] may unlock significant renewable energy in the medium term. The City of Cape Town is embarking on a wheeling pilot project where the technical and administrative aspects of electricity wheeling will be tested.  This pilot research project will include a limited number of third-party participants to investigate, test and finalise the wheeling facility. The pilot will take place over a minimum of one year, and will end with the full implementation of their wheeling facility. In preparation, they have established a set of wheeling rules, tariffs and a draft agreement. They are also in the process of finalising the technical requirements for the connection of generators > 1 MW to the grid, including a draft Grid Connection and Use of System Agreement for such connections, as well as changing their billing processes and systems. The closing date for applications was 30 June 2022, with the announcement of the successful applicants imminent.

6. Small Scale Embedded Generation [SSEG] support

The City has implemented a renewable energy feed-in rate and is currently adding an additional feed-in incentive rate of 25c per kilowatthour [kWh] which is applicable to June 2025. This medium-term guaranteed additional feed-in incentive coupled with the existing feed-in rate means that the payback period of solar PV investments is drastically reduced for users that expect to feed some energy back into the grid. Any energy that is fed back into the grid buys some time for Eskom / the City to refill diesel reserves or pumped storage schemes, which in turn reduces the need for load shedding.

Additionally, many resources are made available by the City to guide renewable energy installations. This includes a CoCT Energy PV (photovoltaic) Brochure (https://resource.capetown.gov.za/documentcentre/Documents/Graphics%20and%20educational%20material/CCT-Energy-PV-Brochure.pdf) which gives great advice on aspects like the different kind of systems available, and how to choose an installer. An additional resource that adds value is the approved inverter list which ensures that good quality equipment is installed on the network.

7. Innovative financing for SSEG

The City of Cape Town has been investigating alternative financing for SSEG including Property Assessed Clean Energy [PACE]^[9].

The City of Cape Town is also undertaking (or planning to undertake) a number of other activities including:

• Contracted demand management
• Driving energy efficiency in their own municipal operations (Over the last 10 years, the City’s energy efficiency in municipal operations programme has saved over 231 GWh of electricity)
• Shaping regulatory and incentive mechanisms to support net zero carbon buildings
• Waste reduction
• Building an efficient transport network

Additionally, the City of Cape Town had previously published a proposed roadmap to achieve the Climate Change Strategy of the City see picture below^[10].

^[11]