WESTERN CAPE. – The City of Cape Town has signed its first two power purchase agreements with independent power producers and will, according to the City, pay 19% to 21% less than Eskom's current tariffs for electricity.
The two 20-year agreements comprise a total of 70 MW of solar power. A further tender process will follow to eventually purchase 200 MW from independent power producers. The solar projects will be connected to the city's network. One facility of 30 MW is being developed by JEMPEC in Atlantis, while Make A Difference LLC will supply a 40 MW facility in Philippi.
According to Mayor Geordin Hill-Lewis, the city is expected to purchase approximately R8 billion worth of electricity under the two agreements, with the requirement that electricity prices over the full 20 years must remain lower than Eskom's tariffs. Price increases under the agreements will be linked to the consumer price index (CPI), rather than to Eskom's tariff increases. "Families cannot be expected to absorb endless Eskom price increases forever," Hill-Lewis said.
The City says the two projects are expected to also prevent nearly two million tons of carbon emissions. This could enable the City to earn carbon credits that can be traded on the open market. Cape Town has already earned R36 million from carbon credits through municipal waste-to-energy initiatives. The City further said it plans to eventually purchase 700 MW of independent power. According to the City, residents and businesses have since June 2024 also together earned R67 million by selling 150 GWh of surplus solar power to the City in exchange for municipal account credits and cash.
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This article is an automatic English translation of a Nuusflits article originally published in Afrikaans. Read the Afrikaans original.
