Finance and Economic Opportunities

1 [a] Through the Municipal Energy Resilience [MER] Initiative’s private sector enablement component, the following projects are being implemented:

[i]  Profiling the future energy demand of private sector high electricity users in the Western Cape [WC]: This project involves the identification of, and engagement with, the highest electricity users in each municipality [5 for each local municipality and 20 for the City of Cape Town] in order to determine their current and future electricity requirements and plans, including the implementation of energy systems and / or the use of wheeling. The project will include recommendations for potential barrier removals. Following the profiling, the intention is to map the information against municipal grid capacity [where available, with five updated municipal electricity masterplans being funded through the WC MER Fund and a further three through the Department of Local Government], feed the data into the municipal revenue impact assessment project below, feed into the Long-Term Energy Plan work being undertaken by WCG, and open channels of communication between businesses and municipalities towards enabling the implementation of energy projects.

[ii] Municipal wheeling revenue impact assessment: The project will use the data gathered in the project above to develop a model to determine the potential municipal revenue impact of allowing wheeling on specific municipal networks]. The model will be used to determine the potential impacts for other municipalities toward supporting their decision-making regarding wheeling.

[iii] Draft framework for Use of Systems agreements for municipal wheeling: This project will provide standardized Use of Systems agreement templates for all municipalities, based on actual mature projects in George Municipality, that can be used to accelerate the deployment of electricity wheeling. These agreements are required by energy developers and municipalities to enter into any wheeling transaction, and by standardizing the documentation we aim to reduce the costs and timeline associated with wheeling transactions.

[iv] The MER team is further involved in a national wheeling colloquium including members from various municipalities across the country, national entities [including Eskom, SALGA, Presidency, DMRE] and various large energy users. The aim of the colloquium is to propose a standard approach for wheeling.

[v] The province is also currently underway with collecting and verifying the capacity of registered SSEG systems from local municipalities as well as understanding the challenges registered owners and municipalities are currently experiencing with these systems so that we can better understand how we may be able to assist all.

1[b] To date, the total cumulative capacity of registered SSEG within the Western Cape is 180 MWp. This data is collected quarterly from municipalities and includes all systems that are registered with the municipality. Previous work and engagements with municipalities have indicated that a portion of SSEG systems currently installed may be unregistered and therefore this figure is regarded as being conservative.

1[c] It is the goal of the province and the MER Initiative to have 500 MW of lower carbon electricity produced in the Western Cape by 2025, which will include SSEG and wheeling as well as pioneering projects at municipalities and large-scale REIPPPP projects.

1[d] Currently 23 of the 24 local municipalities within the Western Cape as well as the City of Cape Town allow for SSEG installations, while 20 local municipalities and the City of Cape Town have SSEG feed-in tariffs. See appendix A.

1[e] According to a Meridian Economics paper [June 2022], 5.2 GW [i.e. 5 200 MW] of additional renewable energy would have reduced load shedding by 96% in 2021. During 2022 the shortfall has increased as indicated by the increased load shedding experienced. Typically, the Western Cape accounts for about 10% of the national energy use, which means that the Western Cape conceptually had a shortfall of approximately 520 MW in 2021. However, it is important to note the following:

• Viewing the Western Cape as a separate entity is not possible due to the interconnectedness of the grid and generation capacity.
• The electricity shortfall changes on a very frequent basis – Stage 1 of load shedding means that the country is 1 000 MW short, while stage 6 means a 6 000 MW shortfall.

[2] Municipalities are required to submit their tariff applications to NERSA on an annual basis. This information could be requested from individual municipalities or from NERSA.

Appendix A:

#	Municipality	Allow SSEG	Feed-in tariffs
1	Beaufort West Local	Yes	Yes
2	Bergrivier Local	Yes	No
3	Bitou Local	Yes	Yes
4	Breede Valley Local	Yes	Yes
5	Cape Agulhas Local	Yes	Yes
6	Cederberg Local	Yes	Yes
7	City of Cape Town	Yes	Yes
8	Drakenstein Local	Yes	Yes
9	George Local	Yes	Yes
10	Hessequa Local	Yes	Yes
11	Kannaland Local	Yes	No
12	Knysna Local	Yes	Yes
13	Laingsburg Local	Yes	No
14	Langeberg Local	Yes	Yes
15	Matzikama Local	Yes	Yes
16	Mossel Bay Local	Yes	Yes
17	Oudtshoorn Local	Yes	Yes
18	Overstrand Local	Yes	Yes
19	Prince Albert Local	Yes	Yes
20	Saldanha Bay Local	Yes	Yes
21	Stellenbosch Local	Yes	Yes
22	Swartland Local	Yes	Yes
23	Swellendam Local	No	No
24	Theewaterskloof Local	Yes	Yes
25	Witzenberg Local	Yes	Yes