This week, on 6 April 2023, the City of Cape Town will issue a tender for its biggest power purchase tender yet. A request for submissions for a 500 MW tender will be issued for competitive proposals this week. The tender will be for 500 MW of dispatchable energy that is an important pillar of the plan to protect residents from the first four stages of Eskom’s load-shedding within three years.
Cape Town Mayor Geordin Hill-Lewis says, “We are confident that Cape Town will be the first metro to break free from the suffocating hold that Eskom has placed on our country, and in doing so enable meaningful economic growth and investment that helps more people into work over time. The City is on track to offer protection from the first four stages of Eskom’s load-shedding within the next three years. In this way, we are positioning Cape Town as a beacon of hope, showing what can be achieved in South Africa.”
The 500 MW dispatchable tender comprises the following:
- Power generation purchases from plants focusing on dispatchable technologies, including battery storage and some gas-to-power.
- The City adds that the power sources need to provide power for a significant portion of the day to support the City’s load-shedding protection efforts.
- Importantly, these dispatchable supply sources need not be located in a City-supply area.
- Successful bidders will enter into 10-year Power Purchase Agreements (PPAs) with the City, and the potential is there for multiple bidders to be awarded contracts under this program.
Last week, Mayor Hill-Lewis tabled the City’s ‘Building Hope’ Budget for public comment. The budget, which contains R2.3bn to end load-shedding plan over three years, includes R220m to buy power on the open market, R288m for the Power Heroes voluntary energy savings incentive scheme, R1bn to operate Steenbras Hydro Pumped Storage Scheme, R53m in ‘cash for power’ payments for solar power from residents and business, R640m on City-owned solar plants, and R50m in battery storage technology.
Here is a summary on the progress of the other components of City’s load-shedding protection plan:
- Phase 1 of the 200 MW renewable energy from IPPs tender: Contracts for this phase remain on track for final awarding within 2023.
- Power Heroes Programme tender: Awarding of contracts for preferred bidders expected in April. This is an initiative to unlock incentives for residents through third parties for voluntary energy savings, which will entail automated remote switching off of power-intensive devices at peak times.
- Cash for Power feed-in tariff increased by 10.15% for 2023/24, plus 25c per kWh incentive: Cape Town is the first city in the country to offer households and businesses cash for their excess rooftop solar power.
- A Request for Information has been issued asking the market for energy trading solutions, including market operation and underwriting services, energy aggregation services and other services related to energy trading platforms. This is to support the City’s load-shedding protection program.
Cape Town is the first metro area in South Africa to embark on this innovative and technologically-forward initiative. Although gas-to-power is mentioned as being part of the new 500 MW tender, Cape Town’s programs to augment its electricity supplies are mostly centered around renewable energy. I am looking forward to seeing more metros in South Africa embarking on such progressive projects to help alleviate the incessant load-shedding.
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