ETHEKWINI Municipality is considering options to source its electricity from Independent Power Producers (IPPs).
This was revealed by eThekwini mayor, Mxolisi Kaunda, during a sitting of the Executive Council on Tuesday.
IPPs are private entities (in the unbundled market) that generate their own electricity and then sell it to a central utility like Eskom.
During the State of the Nation Address earlier this month, President Cyril Ramaphosa announced that municipalities in good financial health would be allowed to buy their own electricity from IPPs.
DA caucus leader, Nicole Graham had written to the mayor asking for the matter to be tabled for discussion at Tuesday’s meeting.
“It’s critical that we look at securing power from alternative sources to mitigate the economic and societal impacts of loadshedding and electricity instability. Now that the President has made allowances for this, it’s critical that eThekwini takes steps to urgently establish this system,” she wrote.
Kaunda said the matter of IPPs was being processed by relevant parties in the city and would have a report for discussion at the next meeting of Exco.
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Ernest Smith, Morningside councillor, said he would welcome IPPs but there were a lot of complex questions that would need to be answered in terms of how they would operate, whether they would sell to the public or if they were only there to cover the shortfall.
“Considering the state of Eskom’s limited capabilities and the far ranging consequences of poor/lack of maintenance especially here in eThekwini, I think that the introduction of IPPs would certainly change public perception of how electricity is generated and supplied. However, the legislature governing this needs to be effectively investigated in order to ensure that energy users get the bang for their buck as well as a consistent, trustworthy and reputable electricity suppler ” he said.
Smith said the IPPs would revitalise the Durban business economy and bring about much needed foreign investor confidence.
Legislation guiding the implementation of IPPs is still uncertain despite Ramaphosa’s pronouncements.
The city of Cape Town currently has a case against the National Energy Regulator of South Africa in the Gauteng High Court seeking permission to be able to procure its own electricity from IPPs.
The matter is set to be heard in May 2020 and will likely set a precedent for how municipalities in SA deal with IPPs in future.
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