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Municipalities can now generate their own energy
The promulgation of the Electricity Regulation Act Regulations in October 2020 opened the door for municipalities to start investigating how they can generate their own electricity and purchase electricity from independent power producers (IPP).
The Minister of Mineral Resources and Energy, Hon. Gwede Mantashe, gazetted amendments to the Electricity Regulations on New Generation Capacity, 2011 in terms of the Electricity Regulation Act, 2006, providing scope for municipalities to develop their own power generation projects, subject to certain requirements.
The amendments clarify changes regarding determinations that may be made by the Minister under section 34 of the Act. Important amendments are: 1. Only organs of state active in the energy sector may procure new generation capacity; and such procurement now includes, amongst others, base load, mid-merit load, peak load new generation capacity, and energy storage. 2. Municipalities, as organs of state, are now eligible to apply to the
Minister for the procurement or purchase of new generation capacity in accordance with the Integrated
Resource Plan. Should a municipality decide to make use of this amendment it must: • Conduct and submit a feasibility
Solar Pannels & wind turbines storing energy from the sun
study, where it intends to deliver the new generation capacity project through an internal mechanism as defined in section 76(a) of the
Municipal Systems Act. • Submit proof that it has complied with the provisions of section 120 of the Municipal Finance Act and the Municipal Public-Private
Partnership Regulations, where it intends to deliver the new generation capacity project through an external mechanism described in section 76(b) of the Municipal Systems Act and submit proof that the application is aligned with its Integrated
Development Plan. • The conclusion of power purchase agreements between buyers or procurers and IPPs will be further subject to any approvals required in terms of the Municipal Finance
Management Act. How municipalities will benefit
By introducing these amendments the door is now open to municipalities to creatively explore alternative methods of procuring energy. Up until now Eskom has been the sole and exclusive provider of energy to the whole country including municipalities.
Municipalities can now explore alternative energy sources and through these sources bypass the Eskom grid. This would also allow municipalities to
generate energy and sell their surplus to Eskom thus supplementing their revenue streams. Municipalities will thus be able to harness energy from the wind, sun, methane and other sources. First out of the starting blocks Stellenboch Local Municipality in Cape Town has taken advantage of these amendments and recently tabled a report to the full Stellenbosch Council for approval to investigate the procurement and use of alternative energy sources as allowed by the amendments.
The Council approved the implimenation of the report and is now proceeding to look at alternatives available to the council.
According to a statement by Stellenbosch Mayor, Gesie van Deventer, the joint investigation will focus on various potentail sources of energy production, including rooftop solar panels, methane mining, allowing the public to generate electricity and sell this to the municipality, purchasing electricity directly from independent power producers and the possible selling of electrcity to willing buyers from outside their municipal area.
Van Deventer said that with blackouts and load shedding frequently sweeping across the country it has become imperative for municipalities to start investigating other energy sources and said that their decision puts Stellenbosch in the lead to potentially become the first municipality in the country to eliminate load sheding.
“While there is still a long road ahead in the battle against load shedding, today’s decision marks the official start of a journey for Stellenbosch Local Municipality that may culminate in energy independence and long-term energy sustainability. The adoption of this report by Council paves the way for an investigation into the need, viability and opportunities to be conducted.
“In addition to benefitting from years of sustained good governance, our Municipality is in the fortunate position of having some of the brightest minds in the energy sector right on our doorstep.
“We will be able to make use of brilliant internal research entities, experts at the University of Stellenbosch, the Council for Scientific and Industrial Research (CSIR) and the Western Cape Government as part of our joint investigation”.
“This joint investigation will focus on various potential sources of energy production, including rooftop solar panels, methane mining, allowing the public to generate electricity and sell this to the municipality, purchasing electricity directly from registered IPPs, and the possible selling of electricity to willing buyers from outside our municipal area,” Hon. Gesie Van Deventer.
Given these exciting developments in the energy sector, municipalities now have the opportunity to investigate creative and affordable ways of generating energy that will improve energy service delivery to their various communities.
Solar Pannels storing energy from the sun
