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Western Cape launches the Municipal Energy Resilience Project

Western Cape is moving towards a decentralised system of energy generation and distribution to mitigate the risk of load shedding in South Africa.

Cape Town – The Western Cape Government Department of Economic Development and Tourism this week launched the Municipal Energy Resilience (MER) Project, through its Green Economy Unit. The Municipal Energy Resilience Project is to assist municipalities to take advantage of the new energy regulations, which may include purchasing energy directly from Independent Power Producers (IPPs). 

The launch of the Municipal Energy Resilience Project is to assist municipalities to take advantage of the new energy regulations

Premier Alan Winde

The MER Project will serve to help municipalities across the Western Cape to understand the requirements of the new national energy regulations, whilst at the same time mitigating related risks. It will also provide network and operational capacity requirements for energy projects development and procurement in municipalities. 

The Green Economy unit of the Department of Economic Development and Tourism is working in collaboration with the Department of Local Government and Provincial Treasury to enable the development of energy projects and engage with municipalities on multiple fronts.

Municipal Energy Resilience Project facilitate municipalities’ readiness for procurement of IPP energy

Cumulative load shedding in 2020 was 23% worse than in 2019, costing the Western Cape economy R75 million per stage, per day. To ensure a more secure energy future, the Western Cape Provincial Government and its municipalities are moving towards a decentralised system of energy generation and distribution to mitigate the risk of load shedding in South Africa. 

Procurement of energy at utility and municipal distribution scale from IPPs, under conditions of developing and evolving policies and regulations is a complex and challenging task. Many municipalities may not have the policies, plans, resources, funding, or procurement expertise to procure wholesale electricity from sources other than Eskom, specifically IPPs. Most municipalities’ electricity distribution systems have not been technically evaluated to clarify their readiness to support new electricity generation and energy trading. MER seeks to facilitate municipal readiness for this process.

A phased implementation approach

The Municipal Energy Resilience Project is structured in the three phase below:

  • Phase 1 involves the identification of potential candidate municipalities and pioneering projects and the development of a roadmap for rolling these out. The work will explore multiple pioneering renewable energy technologies and scales, cost options, scale of investment required, location issues, risks, municipal readiness needs, infrastructure needs, timelines to get capacity onto the grid, transaction and procurement mechanisms and regulatory issues.   
  • Phase 2 will focus on starting the implementation of the pioneering energy projects in the identified candidate municipalities along with working with municipalities to help fill gaps to enable future energy project implementation.
  • Phase 3 will see the development of a master plan for energy projects to be rolled out in municipalities along with the commencement of energy projects in further municipalities as budget allows.

The province says that only a few municipalities are likely to be able to procure utility scale energy from IPPs in the near term. Other municipalities will however pursue other energy generation and storage opportunities that may serve to improve municipal energy resilience and future economic growth in the Western Cape.

The Green Economy unit is expediting some energy resilience related initiatives, including support to municipalities to develop and revise SSEG feed-in tariff frameworks and feed-in tariffs. It is also mobilising businesses to develop rooftop solar PV, supporting municipalities to enable wheeling on their grid. Other activities of the Green Economy Unit also involve supporting energy sector businesses and the provision of energy technology and cost options to businesses and municipalities, and support to green economy investors in the Western Cape. 

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