Statement by Cape Town Mayor, Geordin Hill-Lewis

While I am cautiously optimistic about President Cyril Ramaphosa's plan to begin addressing the power crisis, the City of Cape Town will continue to move forward with its plans to become more independent of Eskom and end load-shedding over time.

Many of the steps announced by the President are in line with what has been proposed by energy experts and economists and included in the 10-point plan to end load-shedding, that I proposed to him two weeks ago.

I am, however, concerned that the President's plan continues to double down on Eskom as the primary solution to the nation's power crisis, when it is in fact the cause.

The fundamental and systemic problems at Eskom will not be solved overnight. The years of corruption, mismanagement, and decline in skills and expertise at Eskom (in addition to ill-considered national government policy) are responsible for the country's power crisis.

Even with its current strong leadership and the President's plan, the changes required to dramatically improve Eskom's efficiency and reliability will take years to come into effect. Further, the state's incapacity to stop the ongoing criminal sabotage of Eskom's assets and infrastructure raises concerns about whether the utility could ever again be up to the task of powering the nation.

This underscores the need for the City of Cape Town to continue its programme of reducing our reliance on Eskom over time, so that we can achieve energy security independently of the defective utility.

Notably, the President's plan does not acknowledge that municipalities like Cape Town are best positioned (Constitutionally and operationally) to get new power onto the grid and into people's homes. It is regrettable that the President has not announced any specific measures to facilitate the procurement of power by municipalities, which face mountains of delay-inducing red tape.

I hope the announcement of "special legislation", to be tabled in Parliament to address the legal and regulatory obstacles to new generation capacity, will also result in a rationalisation of the restrictions currently binding municipalities seeking to procure power.

I welcome the scrapping of the arbitrary 100MW licensing threshold for private generation — a measure we proposed to the President earlier this month. The President must, however, ensure the Nersa registration process for generation projects does not take many months to complete or is not overly onerous in its requirements.

The President's commitment to incentivising businesses and households to generate electricity and sell it back to the grid is laudable. The City of Cape Town has already taken several steps in this direction and we believe it will be a helpful policy nationally. The City now pays commercial and industrial generators cash to sell back their excess electricity to the City, incentivising them to become net generators. We plan to roll this out to residential generators in the short term.

Finally, I note the President's commitment to procure more generation capacity through further bid windows in the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). While this commitment is positive, it must be noted that this is not a new plan and that it has failed in the past.

While 6 322MW of capacity was allocated in tenders between 2011 and 2014 (bid windows one to four), the programme subsequently stalled. If national government had ensured the continuity of the programme by cleanly and diligently working through awarding the tenders, up to 6 000MW more capacity would have been online by 2021.

Whether the REIPPPP is able to contribute to increased energy security in South Africa is fully in the hands of the national government. We will support the President, however he requires us to, in his attempts to achieve energy security. Energy security for South Africa means energy security for Cape Town, and this is our goal.

At the same time, the risks are too immense for us not to seek greater independence of Eskom, especially not until we see concrete evidence of turnaround at the utility financially and operationally. The City will continue to do whatever it can to decrease Cape Town's reliance on Eskom and achieve complete energy security in this decade.

Source: City Of Cape Town