RNM might have a solution for power
RNM is one of the four municipalities that are project developers selected as beneficiaries of the Pre-Feasibility Studies development undertaken by technical advisors in partnership with the bank.
The Development Bank South Africa (DBSA) has applied to conduct a full feasibility study for an alternative energy embedded generation plant for Ray Nkonyeni Municipality.
A presentation by Lindeni Khumalo of DBSA during council on Tuesday was discussed.
In 2020, the minister of mineral resources and energy amended a regulation, giving municipalities the ability to procure new electricity generation under certain boundaries.
RNM is one of the four municipalities that are project developers selected as beneficiaries of the pre-feasibility studies development undertaken by technical advisors in partnership with the bank.
The output consisted of a technical report, financial report including financial modelling and an impact quantification report.
The scope of the project was to conduct a pre-feasibility study and develop of a financial model for an embedded generation solar PV plant. The possible site for the project is said to be in Marburg.
The estimated cost of the detailed feasibility study is R19.3 million, the municipal contribution for detailed feasibility study is R5-million and estimated savings for the municipality is R40-million yearly, savings based on the financial model.
The next stage of the project entails the development of a detailed feasibility study that will ensure that the project is financially sound and technically viable to attract investors.
RNM is required by the DBSA to demonstrate commitment to further development of the project through co-financing of the detailed feasibility studies.
The prefeasibility financial analysis compared the 2019 Eskom tariff of R1,02c per kWh, of which the embedded generation project tariff was found be lower than the Eskom tariff for the operational period of the project.
Khumalo said this will help the municipality to enhance their capacity and reduce electricity costs.
Councillors were concerned by a few things, such as the life span of the model, and the costs of maintaining it.
Khumalo said it has a 20 year life span but at between 10 to 15 years, ‘something’ would have had to be replaced or fixed.
Another issue was the R5-million that RNM would have to provide in order for them to actually own the project.
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