The Western Cape Government has welcomed the national government’s gazetting last week of approval for the generating of electricity by independent power producers.
The approval by Minister of Mineral Resources and Energy, Gwede Mantashe comes as South Africa faces its worst year for load shedding on record. According to the gazette, Eskom will now be forced to buy the new electricity from the successful independent power producers.
It is estimated that load shedding to date this year has cost the South African economy in excess of R160 billion. The gazette determines that South Africa must get 6 800 new megawatts (MW) of wind and solar PV power, while 513 MW should be procured to be generated from storage, 3 000 MW from gas and 1 500 MW from coal. The first electricity from these projects should land on the grid in 2022.
David Maynier, Western Cape Minister of Finance and Economic Opportunities said he welcomes the decision by government as it paves the way for more energy security in the Western Cape.
“Investment in this green infrastructure is in line with post-Covid-19 recovery opportunities and is estimated to provide R40 billion of investment per year to the economy in South Africa. This investment is in line with our strategic objective of growing the green economy in the Western Cape,” Maynier said.
“We call on Minister Mantashe to maintain the urgency required to ensure procurement and the finalisation of power purchase agreements to bring these projects onto the grid. We also look forward to the minister providing more clarity on when and how municipalities could also participate as purchasers of electricity where appropriate, and not only from Eskom, as has been the historical precedent,” he said.
Maynier said he recently visited the Perdekraal East Wind Farm near Matjiesfontein, which is a great example of how private sector investment in renewable energy infrastructure not only contributes to power supply but can also create jobs and grow the economy in the Western Cape.
Under the new plan, municipalities can also apply to establish new generation capacity in accordance with the integrated resource plan, and such an application should be accompanied by a detailed feasibility plan. This is expected to open new investment and revenue opportunities for towns and cities, especially in the Western Cape where the government has already said it will continue to do everything it can to support businesses to participate in the growing green energy sector and to become more energy resilient in the province.