MIREILLE WENGER: Increasing energy resilience in the Western Cape to mitigate load-shedding

The Cape Town International Convention Centre played host to Enlit Africa Conference 2022 last week. Marketed as Africa’s premier conference and exhibition for the entire power and energy value chain, this event contributes towards overall energy resilience, which could not be more important for our economy right now.

SA’s current energy security and reliability is deeply concerning and well documented. According to Eskom’s 52-Week outlook of May 30, the likely risk scenario indicates that at the very least stage 2 load-shedding should be expected each week for the rest of the year. There is the possibility of dropping to stage 1 in mid-July and late August. However, the fact remains - Eskom is operating on a constant knife edge, and for each stage and each day of rolling blackouts we shave more and more off the economy.

On the upside, national government is increasingly providing greater policy certainty, including the important role that renewable energy must play in building energy resilience in SA. The Western Cape economy is benefiting greatly from these improved market conditions. In terms of utility-scale projects alone, developed through the national Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), a total of 8,272 GWh of energy has been produced by projects in the Western Cape since the inception of the programme. This currently equates to about 1,576 GWh of renewable energy generated annually (based on 2021 numbers). Through the REIPPPP a total of 592MW of renewable energy is currently operational in the Western Cape, with a further 785MW of preferred bidders approved for the province in bid window five (yet to reach financial close).

These projects feed directly into the national grid and are further transmitted by Eskom. So, while the renewable energy projects will not shield the province from blackouts at this stage, any additional capacity on the grid is good for all of us, not only because it contributes to a cleaner and greener future, but importantly because of the economic benefits for the Western Cape, especially in terms of job creation.

So, what are we doing to mitigate load-shedding and build longer term energy resilience in the Western Cape? The answer is - a lot! The Western Cape government’s Municipal Energy Resilience (MER) initiative is a multifaceted approach to growing the industry while addressing the energy challenges in the Western Cape.

The MER initiative looks at improving energy resilience in municipalities across the Western Cape through facilitating, supporting and positioning our municipalities for the implementation of energy infrastructure development (public and private) that supports economic growth, municipal financial sustainability, and a low carbon pathway. The MER initiative’s short-term goal is to enable 500MW of new low-carbon energy generation capacity in the Western Cape by 2025. Currently, the work is focused on several areas, all of which support the growth of the industry.

We are working to enable the private sector to take up renewable energy through direct and indirect engagements with energy sector businesses and with businesses wanting to improve their energy resilience. We are engaging directly with large electricity users on Western Cape municipal grids to develop an understanding of their needs and requirements, which will guide strategic thinking, including municipal electricity infrastructure planning, going forward.

Significant time is currently being spent on the enablement of electricity wheeling on municipal grids, which will allow private sector entities to transport power over the grid to another businesses, organisations or facilities, while ensuring costs are allocated correctly to ensure municipal revenue sustainability. Wheeling reduces some of the geographical limitations of renewable energy, such as too little space or non-ideal local solar and wind resources. We have supported the development of wheeling frameworks and wheeling tariff applications in seven Western Cape municipalities, and both George Municipality and the City of Cape Town are currently running wheeling pilots.

We also continue to drive the uptake of small-scale embedded generation (rooftop PV) at the private and household level by creating an enabling environment for renewable energy, with 21 of 24 local municipalities in the Western Cape allowing small-scale renewable energy on to the grid. Twenty of these municipalities have feed-in tariffs that allow households and businesses to be compensated for feeding their excess energy back into the municipal networks.

Over the last financial year significant work has been completed on unlocking municipal direct procurement of renewable energy from Independent Power Producers (IPPs). This includes the development of pioneering projects in a select group of municipalities, including a road map towards procurement.

The next step is to support municipalities, such as the City of Cape Town and the pioneering projects, through the phases of feasibility studies, procurement and contracting with IPPs. We are also focused on the exploration of a potential municipal pooled-buying facility to address risks and economies of scale.

To support this work the Western Cape MER Fund is currently supporting 13 preparatory studies at eight Western Cape municipalities. These studies include electricity master plans, energy master plans and cost of supply studies.

Finally, we have supported the development of a green economy finance database to enable the sector to access financing opportunities, and we are working to better understand and access the green economy related funding and financing landscape. To support municipal financial sustainability in the face of the energy transition, we are also working to explore alternative municipal financial models.

A great deal of work has already taken place over the past decade to develop the green economy in the Western Cape. Already those living in Cape Town feel the benefit of being buffered from a stage of load-shedding. We are committed to seeing this happen in many more municipalities across the Western Cape.

Increasing our energy resilience and mitigating the impact of load-shedding are priorities for me. If we can secure a stable and affordable supply of electricity, businesses will be able to grow and create more job opportunities so we can give hope to the people of the Western Cape.

• Wenger is Western Cape finance & economic opportunities MEC.