SPECIAL FEATURE
Powering the province The Western Cape is moving away from fossil fuels.
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he City of Cape Town has set a target of generating 20% of its electricity from renewable energy and it is going to court to try to make sure that this happens. The first medium-term budget policy statement of new Finance Minister Tito Mboweni in October 2018 was mostly designed to calm the markets after a tumultuous time in the political sphere. As a well-respected former Reserve Bank governor, Mboweni was almost universally welcomed as a steady hand on the country’s finances. What he said about electricity was significant. Mboweni said, “Restructuring of the electricity sector is underway. This must include a long-term plan to restructure Eskom and deal with its debt obligations.” Mboweni’s predecessor, Nhlanhla Nene, had previously said that the restructuring of Eskom was “top of the agenda”. Eskom runs electricity generation, transmission and distribution and it is a monopoly. Mboweni’s statement opens up the possibility that a longstalled plan to divide up these functions could eventually take place. In 2013 a parliamentary WESTERN CAPE BUSINESS 2019
bill called the Independent System and Market Operator (ISMO) was passed but allowed to lapse in the same year. Unreliable and expensive power is a massive constraint on business, and provincial and city governments in the Western Cape are champing at the bit to be allowed more freedom to participate in the sector. When South Africa ran out of power in 2008, a programme to get private investors to build renewable energy capacity was introduced, the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). Between November 2011 and July 2016, South Africa received commitments of investments to the value of nearly R200-billion through this programme. It had by May 2016 delivered the promise of 6 377 megawatts (MW) with an investment value of R250-billion and many of the projects are already delivering electricity to South Africa’s grid. Figures released by the South African Wind Energy Association (SAWEA) showed shareholding
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