Premium: Cape Town’s drive to energy self-sufficiency hits global headlines

Helen Zille's Democratic Alliance has been in the news lately through the loss of some leading lights. But judging by the performance of its Young Lions, the party is not short on youthful talent..My KZN family and friends tell me uMngeni's 31-year-old executive mayor Chris Pappas continues to impress. In the Mother City, his 35 year-old counterpart Geordin Hill-Lewis, last week announced concrete steps in fulfilling a campaign promise to end loadshedding in Cape Town..Ahead of November's Local elections, the DA's then mayoral candidate targeted 500MW more in independently-produced electricity adding to an existing 100MW from the city's Steenbras hydro plant. He said this would effectively end loadshedding, because even at its peak (Level 6) Eskom's supply to the city has never been cut by more than 600MW..___STEADY_PAYWALL___.Yesterday our UK partners at the Financial Times (see below) quoted from an interview with Hill-Lewis where he is now committed to a 40 month deadline to secure 300MW. Ending loadshedding would be a game-changer for many potential "semigrants". Unless, that is, other cities follow CT's lead..More for you to read today:.Russia-Ukraine Tensions Power Gold to Eight-Month Highs. Geopolitical worries fuel gains even as expectations for interest-rate increases weigh on the climbChina Orders Cuts for Food-Delivery Fees, Sparking Tech Selloff. Beijing's instruction knocked 15% off share price shares of online delivery giant Meituan, in which Naspers associate Tencent is the biggest shareholder.Jean-Luc Brunel, an Associate of Jeffrey Epstein, Found Dead in Paris Prison. Modeling agent was being investigated for allegedly raping minors, child sex trafficking and sexual harassment.PS: Join me for our traditional post-Budget webinar on Wednesday night where I'll share everything learnt in "lockup". Register by clicking here..Then on Thursday at noon is the monthly BizNews Portfolio update webinar. Click here to register..From the FT: Cape Town to source its own power as state owned monopoly Eskom falters.Frustration over government lack of reform and persistent blackouts push city to look towards independent producers .By Joseph Cotterill of The Financial Times of London.Cape Town is to source electricity from independent producers, the first South African city to do so and a sign of increased frustration with the government's inability to reform the blackout-prone state-owned Eskom monopoly..Geordin Hill-Lewis, the mayor of South Africa's second-largest city, told the Financial Times that his administration wanted to set an "aggressive" pace as it procures at least 300 megawatts of renewable energy from independent producers in the next 40 months. This is a fraction of the 2,000MW used in the peak winter period.."We have set quite a hard timeline because these are brand new deals for South Africa," Hill-Lewis said. "The way to do it is not to tiptoe through it for the next 10 years — it is to be really aggressive. And there is a whole lot of grey areas that will be resolved in being aggressive.".Rolling blackouts, known as load-shedding, have crippled South Africa's economy in recent years. Eskom, whose ageing coal plants generates nearly all of South Africa's power, has said it needs 4,000MW to 6,000MW of additional capacity to shore up supply..But even an "emergency" programme for the utility has faltered — the government is proceeding with only 800MW of an original 2000MW emergency procurement. Gwede Mantashe, the energy minister, opened the door to independent municipal generation in 2020, but many have been deterred by red tape..Cape Town, which is under the control of the main opposition Democratic Alliance, is seeking to steal a march on the ruling African National Congress as frustration with the slow pace of reform builds..Hill-Lewis has called on President Cyril Ramaphosa to "back Cape Town as we procure our own power"..The Cape Town power projects would relieve pressure on the national grid but are unlikely to be enough to substantially improve supply. "This is the first important step but it is not yet the final crucial step towards reducing load-shedding in Cape Town, because you have to combine it with storage investment," Hill-Lewis said. "There will be a future procurement on storage as well.".Mantashe said this week that the government would not stand in Cape Town's way, but analysts still believe that red tape could block municipal plans. Hill-Lewis has called for clarity from national government. Already, South Africa's National Treasury has encouraged them to go ahead, Hill-Lewis said. "The language is quite literally, go for it — we need this to happen, we need an example of this working.".In terms of financing, he said "we have had a deluge of offers" to fund the projects. "I'm fairly confident that financing the procurement is not a problem.".However, "some of these finance offers require government guarantees, which is obviously another way the national government could trip us up" if it refuses to issue them, Hill-Lewis said..Some of the $8.5bn pledged at last year's COP26 climate conference to help Africa's biggest carbon emitter to end dependence on coal and speed up the construction of decentralised renewable projects could be directed towards funding independent power producers, analysts said..Eskom currently supplies less than two-thirds of its maximum available generation capacity to South Africa's grid. The utility's coal plants are on average more than 40 years old. Last year was the worst yet for the rolling blackouts in terms of both duration and intensity — records that, based on Eskom's own system warnings, 2022 is likely to challenge as the coal fleet continues to deteriorate.."The primary mistake that Cape Town made for the last decade was to think that the end of load-shedding was just around the corner," Hill-Lewis said. "Unless we start to make our own plan, you are going to get massive [tariff] increases passed on to consumers and less availability of the service, and that is devastating for the economy.."Everything that you hear about poverty and unemployment in South Africa from politicians is just lip service, when you can't provide electricity for your economy to grow. If cities are serious about making an impact on unemployment and poverty, you have to sort out electricity.".NB FOR YOUR WALL STREET JOURNAL ACCESS….As a Premium subscriber you are entitled to full membership of wsj.com (normal price $29 a month). Be sure to action your access through the Premium link on the BizNews website. Because of The Wall Street Journal's credential requirements, be sure to create a password which has at least 8 characters and includes at least one letter and one number – NB it MAY NOT contain any special characters (ie #, !, @ etc). To maintain access to WSJ.com, you MUST enter our partner's website via BizNews Premium at least once a month. A final PS, if you had previously signed up for WSJ you'll need to clear the cookies from your device. Our help desk can assist – support@biznews.com..If you'd like to help sustain our independent voice, why not share the love by making a gift that keeps giving? Click here to access the BizNews Premium subscription signup form, and be sure tick the relevant box. At R100 a month and inclusive of full membership of The Wall Street Journal, it's a mind-expanding gift at an incredibly modest price.

Premium: Cape Town’s drive to energy self-sufficiency hits global headlines

Related Stories