Treasury allows Cape Town to buy IPP power
In what a Business Day report calls a potentially game-changing move, the National Treasury has allowed the City of Cape Town to buy privately generated electricity from households and businesses.
Mayor Geordin Hill-Lewis said yesterday the National Treasury had granted an exemption for the city to pay private users who sold their excess electricity to the local grid.
Hill-Lewis said the Treasury exempted the city from competitive bidding processes.
The exemption also applies to competitive bidding provisions of the Municipal Finance Management Act to enable energy procurement from independent power producers (IPPs).
‘This has the potential to be a powerful force to end load-shedding over time, together with our IPP programme and power heroes incentives for voluntary energy savings,’ Hill-Lewis said.
Energy analyst Chris Yelland added: ‘It seems like Cape Town is leading the way and putting the National Energy Crisis Committee, Eskom and other municipalities in SA to shame.’
According to the exemption, businesses and, in time, residents will receive cash for selling their excess power into Cape Town’s grid.
The city is looking to set up the infrastructure in the next couple of months.
Nersa has approved a rate of 78.98c/kWh for this financial year for the city to pay power sellers. The city adds a 25c/kWh incentive tariff on top of this.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
