Johannesburg residents and businesses that are generating excess power from their solar power installations may soon be able to sell this energy to the city grid.

City Power spokesman Isaac Mangena said a feasibility study into alternate sources of energy had been completed at the end of January and its findings were being studied before the utility embarked on any projects to improve its energy generation mix. Technologies being looked into include, but were not limited to, battery storage, rooftop solar energy, gas and waste-to-energy.

“The study will guide us on how much of which technology we should deploy at which site,” Mangena told Daily Maverick. 

City Power spends R10.3-billion on buying power from Eskom and Kelvin power station (10% or R1.2-billion), which was originally owned by the City but sold to private buyers in 2001. Kelvin is now owned by a consortium led by Aldwych International. 

Kelvin has formed a key part of City Power’s attempts to keep the lights on in the face of rolling blackouts and Mangena said the utility was in negotiation with the power station’s management to extend its 20-year power purchase agreement which comes to an end in November 2021.

“We see Kelvin as a strategic partner to reduce the overreliance on Eskom,” Mangena said, adding that the power station was capable of providing on average a reliable output of 250MW during high season and 200MW during low season. 

Mangena added that part of the renegotiation of the contract with Kelvin included getting the power station to increase its generating capacity to the maximum of its licence capacity, which is 600MW. 

But energy expert Chris Yelland warned that Kelvin was operating “beyond its end of life”, did not provide low-cost electricity, and said City Power needed to implement its alternative plans sooner rather than later. 

“This power station is extremely old and not very efficient, and certainly not operating anywhere near full capacity,” Yelland told Daily Maverick. 

City Power’s long-term plan, Mangena said, was to be a player in the energy generation space, especially in renewable energy generation. 

“This will help to reduce the price of electricity to consumers especially because there are already private players who are proposing bankable ideas with costs below Eskom’s charges. This would also improve the security of supply and avoid load shedding,” Mangena said.

Among the options being explored was the purchasing of excess power generated by residents and businesses.

He said the utility was looking at customers who were producing excess capacity through their infrastructure and was investigating what the prosumer (a person who consumes and produces a product) tariff would be.

“It will enable us to purchase excess capacity produced by our consumers including both residential and commercial customers,” he said, adding that the utility was finalising a metering technology and system necessary to implement the prosumer tariff. 

“We are targeting next financial year for implementation,” he said.

City Power’s power generating plans have become feasible after Minister of Mineral Resources and Energy Gwede Mantashe announced on 3 February that the department was in the process of gazetting a revised Schedule 2 of the Electricity Regulation Act. The change to the legislation will “enable self-generation, and facilitate municipal generation options under distributed generation”. 

A court case is also set to be heard in May 2020 for a declaratory order that clarifies the legal responsibilities and parameters required for power generation by independent power producers.

“The revised Schedule 2 of the electricity regulation act is a good thing… It means we can enter into agreements with IPPs [independent power producers] who can supply. Any easing of impediments toward self-generation by the government as announced will ease the capacity constraints and help us deal with load shedding challenges and implement our strategy,” Mangena said.

The City of Cape Town is also looking at alternate power suppliers.

Cape Town mayor Dan Plato announced on 14 February that the city would start preparing to purchase energy from IPPs. 

Plato said once clarity regarding the roles and responsibilities of municipalities and other stakeholders in terms of the New Generation Capacity Regulations in the Electricity Regulation Act was confirmed, the City would move forward with its plans.

“We are working with the Council for Scientific and Industrial Research about the production of such an Integrated Resource Plan. We are also working with the Western Cape government and GreenCape to look at several game-changers that, from an energy perspective, will greatly contribute to energy security of supply and ensure a transition to a lower-carbon future,” Plato said.

According to Yelland, the City of Cape Town was looking at, among other things, a gas power plant. 

“They are on the coast so they can import liquefied natural gas. They can operate a gas power plant.” 

And while big metros like Joburg and Cape Town sourcing energy from places other than Eskom could increase the power utility’s cash flow problems, it was the way to go, argued Yelland.

“The problem is that the old coal site plants are no longer the cheapest and are no longer reliable. They cause a lot of problems… They cause a lot of pollution – air pollution, water pollution, ground pollution and carbon dioxide emissions – and alternatives are becoming more and more attractive and cheaper.” DM