Cape Town - The City’s announcement that it will pay cash to small-scale embedded generation (SSEG) customers for the excess energy they produce and sell back to the City, has been met with mixed reaction by civil groups.
On Monday, mayor Geordin Hill-Lewis met with about 50 members of Cape Town’s business community to announce two important steps in the City’s journey to ‘ending load-shedding and becoming energy secure’.
Hill-Lewis said in addition to buying energy from the SSEGs, these customers would now be permitted to sell more electricity to the City than they use. In the past, generating customers were required to be net consumers of the City’s energy; they will now be incentivised to become net producers.
Hill-Lewis said previously, these customers could only be compensated by means of credits on their municipal bills but would now become “crucial partners” in ending load-shedding in Cape Town.
Hill-Lewis said while these policy changes would only apply to commercial and industrial customers at first, the City intended to broaden this policy to all generating customers over time, including those with small residential solar PV installations.
“This step-by-step transition will ensure that we are able to get the largest projects — with the greatest capacity to positively impact on load-shedding — online first, and address any teething issues as they arise without putting strain on the City’s supply network,” he said.
Pressure group Stop COCT founder, Sandra Dickson said the announcement was disappointing as the City now “confirms its support to big business while residential ratepayers are left in limbo”.
“Refunding net business producers of electricity in cash, is a logical step as these users may never have to pay any money to the City. This will greatly assist to repay their high start-up costs to install their power producing systems. It will be interesting to see what this arrangement will do to the City's revenue stream for electricity.
“The statement by COCT refers to ‘residents’ being crucial to end load shedding. This is difficult to understand as residents are initially excluded from these policy changes.
“Stop COCT decries the absence of consultation with homeowners and their exclusion from these policy changes. One can conclude that the City is willing to bend its policies to its business customers while homeowners will not be assisted in any shape or form by COCT to install solar/battery solutions,” said Dickson.
SA First Forum convenor, Rod Solomons, said they supported the City’s stance on renewable energy.
“(We) support any attempts to wean the City off full dependence on Eskom. We support the City’s procurement from private sources as long as it is not a situation of them favouring cronies or buddies or people who have funded the DA in the past.
“We also support it if it is not accompanied by huge price increases and that the cost of electricity comes down for residents. We watch it with interest and trust it will work. At this stage we can’t put all our eggs in Eskom’s basket, so we support the initiative of exploring other sources of energy,” said Solomons.
Energy expert, Professor David Walwyn, said the City’s announcement as the first municipality in the country to do energy-wheeling, marked the first step towards the diversification of energy.
“It’s not something new that the City is doing as they have been buying from SSEGs. The difference now is that it will no longer be bought as a credit to their municipal bills. This means there will actually be money exchanged.”
He said from a business model point of view, it was a good move for the City.
“There are two dangers though and that is the privatisation of energy and the how it won’t do anything for peak energy when the sun goes down and suddenly there is a duck-down of energy.
“The privatisation will have to be regulated and subsidised by the state for poorer communities. Also, the City will have to be very clever in how it will serve this alternative sources of energy and how it will serve the energy if it will no longer be up to Eskom anymore,” said Walwyn.
Hill-Lewis said load shedding was the single-biggest economic issue facing South Africa. Eskom’s Stage 6 load shedding this month cost the national economy R4,2 billion per day. “This lost value not only destroys businesses but has put the country on track to lose even more than the 125 000 jobs that load shedding destroyed in 2019 alone.”
Cape Times