Tshwane’s mayor is looking for IPPs

Despite its dire financial situation, the City of Tshwane launched an energy action plan on Monday that is based on leveraging its idle energy assets – the Rooiwal coal-fired power station north of Pretoria and its dilapidated Pretoria West counterpart, which boasts little more than land and grid connection.

Tshwane Mayor Cilliers Brink said the city hopes to procure generation capacity of at least 1 000 megawatts (MW) from the private sector to make it less dependent on the faltering Eskom for its total requirement of about 2 600MW.

The city does not have money for the capital investment needed at the two power stations or in new generation capacity and therefore needs to work with the private sector, Brink said.

To this end, it has obtained council approval for a public participation process regarding a 40-year lease of the Rooiwal and Pretoria West power station sites to independent power producers (IPPs), which will enter into power purchase agreements with the city.

Advertisements inviting comment appeared in several newspapers on Monday.

Inactive power stations … in South Africa

The power stations have been standing idle for about a decade, with Pretoria West previously largely destroyed by fires. Rooiwal is in care and maintenance and said to be ready to be fired up again.

The previous financial year saw the city maintain a staff complement and spend about R300 million on the two power stations – without getting any benefit.

They can potentially generate up to 300MW of electricity, Brink said.

His predecessor Randall Williams tried to bulldoze an unsolicited bid by the Kratos Consortium – which planned to erect gas generation plants at the two sites – through council, but was heavily criticised for disregarding prescribed council processes. It was one of the major factors that cost him the mayoral chain.

City to ‘follow process’

Brink said the city receives proposals and offers of assistance with energy independence daily, but will follow a lawful, competitive process to identify the right partners.

The city hopes to finalise the public participation phase by October and issue a request for proposals (RFP) for the two power stations and a request for information (RFI) for any other proposal towards greater energy independence by November.

If all goes well, contracting may be completed before the end of the financial year at the end of June 2024.

The RFP will, according to city chief economist Lardo Stander, be calling for dispatchable generation options with the resumption of coal-fired power generation at Rooiwal as soon as possible – and a switchover to greener technologies as the 10-year design life it has left runs out.

Bigger picture

Other aspects of the Tshwane energy plan include a revision of the outdated policy for small-scale embedded generation (SSEG) and utilising the possibilities posed by wheeling and rooftop solar as optimally as possible.

It is consulting with the City of Cape Town in this regard.

Brink said that while encouraging residents to embrace SSEG may cost the city electricity sales, it is losing customers anyway.

“I recently spoke to the American Embassy. They have 300 houses in the city that are now all completely off the grid,” he said.

He added that municipalities need to adapt and facilitate the feed-in of any surplus solar energy for reselling.

Read: How load shedding is crippling municipalities

Brink mentioned the possibility of installing rooftop solar with a battery for low-cost consumers and disconnecting them from the grid. That will reduce the risk of electricity theft in those areas to the metro.

What about the party poopers?

Asked how it will deal with Eskom’s restrictive approach to entities utilising their own generation to offset load shedding – as in Johannesburg, where City Power planned to use generation from the private Kelvin Power Station to mitigate load shedding – Brink said the city of Tshwane will fight it.

“We will fight Eskom and Nersa,” he said.

He added that in the current energy crisis they don’t have the luxury of setting conditions.

Brink further disclosed that the city recently finalised its electricity cost-of-supply study which showed that the service ran at a R2 billion loss in the previous financial year.

He said the traditional financial model for municipalities where income is derived from electricity sales simply doesn’t work anymore, as load shedding reduces sales and increases the cost of repairs and maintenance drastically.

Load shedding accounts for a substantial part of the R2 billion loss, he said.

Read: How load shedding is crippling municipalities