Cape Town Plans To Provide Protection From The First 4 Stages Of Eskom’s Load-Shedding Within 3 Years

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South Africa is going through its worst ever period of electricity rationing. The national utility company Eskom has been forced to implement a load-shedding program as it struggles to meet demand due to a number of reasons, including frequent breakdowns at its old coal power plants as well as the delayed completion of some of its new coal power plants.  This has resulted in consumers experiencing up to 12 hours a day of load-shedding.

Reports from South Africa say the Council for Scientific and Industrial Research (CSIR), a leading scientific and research organization in South Africa, says that available data shows that load-shedding could be around for another 10 years. So, the City of Cape Town is not waiting around for such a long period and is planning some interventions to shield citizens from the first 4 stages of load-shedding. Eskom’s load-shedding program is structured in stages, where Eskom sheds a certain quantum of load from the grid to stabilize the grid. So, depending on the severity of the crisis, load-shedding is implemented in stages from Stage 1 to Stage 8, where Stage 1 sheds 1,000 MW of load from the grid and in a Stage 8 scenario, Eskom takes out 8,000 MW of load from the grid. Load-shedding is implemented over 2-hour or 4-hour blocks on a rotational basis depending on the severity of the crises. Stage 8, however, means most consumers will experience a blackout for about 12 hours.

This week,  Cape Town Mayor Geordin Hill-Lewis gave an update on the progress of its three-phase procurement for load-shedding protection. The three-phase procurement for Load-shedding Protection includes:

1. Procurement of new generation capacity from independent power producers. A 200 MW procurement of renewable energy concluded last year. “Tenders are to be awarded in the coming months, with the procurement now in the evaluation phase of technical proposals received from IPPs, said Mayor Hill-Lewis. The Mayor further confirmed that the City is working with the Centre for Scientific and Industrial Research (CSIR) on grid integration studies to determine when and where these IPPs will feed power into Cape Town’s grid.
2. The second phase of the three-phase procurement for load-shedding protection is called the Power Heroes program. The initiative is based on paying residents incentives for voluntary energy savings, which will entail automated remote switching off of power-intensive devices at peak times. “The demand response tender for this programme, launched in October last year, is currently in the evaluation phase, and will also be awarded within the coming months,” said Mayor Hill-Lewis.
3. The third phase of procurement will be launched this February. This will take the form of a Dispatchable Energy tender, expected to yield around 500 MW for the grid. “This tender will not only focus on renewable energy, as the first phase of our Load-shedding Protection Plan, but will include all-important dispatchable technologies, such as battery storage and gas to power. These power sources need to generate power for a significant portion of the day to support our load-shedding protection efforts. Importantly, these dispatchable supply sources need not be located in a City-supply area. We are expecting enough progress on this three-Phase procurement – and our other deliverables – to provide at least four stages of load-shedding protection within three years.

“Procuring 500 MW will go a long way to ending load shedding over time, given that a single load-shedding stage requires the City to shut down around 60 MW. We will add future phases to this plan in time, potentially including more renewables procurement and utility-scale battery storage,” said the Mayor.

In another progressive development, Cape Town recently received Treasury exemption to pay businesses and residents directly for feeding in excess solar to the grid. This means that businesses and homes can get paid in cash for what they feed in. This after National Treasury exempted the City from competitive bidding processes not designed for the coming energy revolution. The sale of excess power by homes and businesses with Small Scale Embedded Generation (SSEGs), among other generation solutions, will contribute to Cape Town’s goal of 4-stages load-shedding protection within three years. Payments to commercial customers will be possible before June, and within the year for any Capetonian with the necessary City-approved generation capacity. If you’re thinking of investing in a solar system, it just got more attractive.

“We aim to buy electricity from as many City supplied customers as are willing to sell to us. These customers may now produce as much power as they can from their approved systems and feed it into Cape Town’s grid. Under this plan, we will also pay these customers an incentive over and above the NERSA-approved tariff as they help us turn the corner on load-shedding. As our network of home power producers grows, so will our city’s energy security. This has the potential to be a powerful force to end load-shedding over time, together with our Independent Power Procurement programme, and Power Heroes incentives for voluntary energy savings,” said Mayor Hill-Lewis.

The National Energy Regulator of South Africa (NERSA) has approved a rate of 78,98c/kWh for this financial year for the City to pay power sellers. The City also adds a 25c/kWh incentive tariff on top of this.

“We are focused on ending load-shedding over time, and the City has steadily been laying the groundwork to enable payment for excess small scale power, including:

Dropping a policy requirement for power sellers to be ‘net consumers’ of energy, which previously only allowed for municipal bills to be credited for excess power, instead of actual cash payments

Commencing a wheeling trial for commercial and industrial users which is helping to iron out technical and billing issues ahead of mass-scale roll out

Allocating R15 million budget to pay for energy generated by small-scale embedded generators for the remainder of this financial year until June.”

Some people commenting on several platforms and forums felt that the feed in tariff was a bit low, but it’s a good start. It could really help some businesses that have large roofs and had been curtailing some of their production from solar during the day. I am looking forward to seeing how this evolves.