Cape Town pushing to buy energy directly from IPPs
City says it wants to move away from sole reliance on Eskom for its energy needs
The city of Cape Town is pushing for provisions to be put in place to allow municipalities to procure energy directly from Independent Power Producers (IPPs). Under current regulations, municipalities can buy electricity directly from IPPs if they get ministerial approval. The city decided to approach the courts in 2017 to challenge Eskom’s exclusive right to buy electricity from IPPs for resale. Cape Town’s legal bid comes as IPPs are under the spotlight following the recent announcement by President Cyril Ramaphosa that Eskom will be split into three separate units — generation, transmission and distribution. Trade unions argue that the proposed split will not solve Eskom’s governance and debt problems, and that it will lead to job losses. Those in favour of the unbundling argue that it will create a more efficient system. A separate Eskom entity focusing on transmission, for example, will give it an incentive to procure electricity from the best-priced producers, including IPPs i...
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