LOADSHEDDING and the lack of a reliable power supply are hindering the KwaDukuza local municipality’s capacity to cater for growth and have had a big impact on the ease of doing business in the district, according to executive director: electrical engineering business unit at the municipality, Sibusiso Jali.
The Vuthela iLembe LED Support Programme’s Synergy for Energy seminars held recently have considered a range of options available to secure reliable electrical power in the KwaDukuza local municipal area.
The two Vuthela seminars have examined how public and private sector stakeholders need to collaborate with local and national entities to counter the devastating impact of the ongoing loadshedding crisis.
Recent regulatory developments are changing the energy landscape significantly.
The KwaDukuza Local Municipality receives all its electricity from Eskom at present. In the future, this supply will be augmented by electricity provided by Independent Power Producers (IPPs), who may produce it from solar, hydroelectric, biomass, gas or ocean resources if feasible.
A draft policy on appointing IPPs has been developed and the process for appointing a service provider to undertake feasibility studies to procure IPPs has begun, said Jali.
A project is also underway to review tariffs, contracts, and metering systems for resellers of electricity, including housing estates, shopping centres, malls, apartment buildings and business parks.
Locally, the KwaDukuza Local Municipality has approved an Energy Policy and is developing new regulations to control the implementation of renewable energy options. Nationally, the Electricity Amendment Bill has been formally introduced into parliament. Meanwhile, the process of receiving public comments on the South African Renewable Energy Masterplan (SAREM) has been completed. The plan is expected to be finalised by November this year and implementation will begin immediately.
These major regulatory developments will require public and private stakeholders to continue engaging and collaborating on plans to produce alternative energy supplies.
The KwaDukuza Local Municipality Energy Policy has been approved by the Council on the understanding that it will be amended frequently, confirmed Chimene Pereira, energy office, director: special projects, office of the municipal manager, who managed the policy development process.
The next step will be to conduct a feasibility study around the best approach for KwaDukuza Local Municipality related to the cost of supply and its current infrastructure.
“The cost-related implications are not fully understood,” said Pereira. “There is a potential for revenue losses and tariffs must still be determined. We are not entirely sure what the financial implication for local government will be under the new policy.”
The new policy will change the way that electricity is generated and procured, with the Council playing a greater facilitation role in the process.
Generation strategies will include embedded power systems like installing rooftop solar PV systems on municipal buildings with or without feeding into the municipal grid. This could be financed through the municipality’s balance sheet, debt or grants.
It may also include building stand-alone power plants like large wind farms or solar parks on municipal land with the possibility of selling surplus power to Eskom. This could be financed through debt or grants, public-private partnerships, operational agreements or special purpose vehicles with other municipalities and partners.
Municipalities will play a facilitation role by buying electricity from local producers and selling it to willing customers. They may also store excess electricity and sell it when the demand is high and provide electricity services like installations and maintenance for a fee.
Commenting on aspects of the KwaDukuza Municipal policy, senior project coordinator from Sustainable Energy Africa, Sinawo Sigalelana, said it was progressive and promoted the uptake of embedded generation for KwaDukuza. The policy clearly articulated the requirements for connecting Small Scale Embedded Generators (SSEG) and confirms that customers can be compensated for feeding back to the grid once a NERSA-approved SSEG tariff is in place.
However, the policy lacked guidance on embedded generation that was not small scale and standards were not explicit.
Sigalelana noted that all embedded generation must adhere to the South African Grid Code, which specifies standards and connection specifications.
The Electricity Regulation Amendment Bill seeks to create a competitive multimarket electricity supply industry managed by a transmission system operator.
The ERA Amendment Bill will allow market participants to trade with each other, registered generators to enter into private power purchase agreements (PPAs) with direct customers, and generators to form PPAs with transmission system operators.
The poor performance of Eskom’s generation unit is the cause of national loadshedding. It is expected that unbundling Eskom will lead to more competitive generation and allow dedicated transmission and distribution companies to expand their operations.
The SAREM aims to support market demand for renewable energy, drive industrial development, foster inclusive development, and build local capabilities in the renewable energy sector. The intention is to capitalise on the growing renewable energy and battery storage market and to use the opportunity for inclusive industrial development.
The 18-month-long process of developing the SAREM involved labour unions, industry players, and community representatives who came together to create a social compact that supports national objectives and promotes the development of renewable energy value chains.
The Vuthela Programme, which is funded by the Swiss State Secretariat for Economic Affairs, comes to an end at the end of 2023. However, participants who say they have derived great value from the seminar series have decided to continue interacting after the funded programme ends.
Enterprise iLembe CEO Linda Mncube said the seminars provided the engagement platform needed for effective collaboration and should be continued.
The need for effective partnerships and collaboration between the private and public sectors to address the impacts of the national electricity crisis emerged as a central theme at both seminars.