Ekurhuleni gets green light to procure 2 400MW of new electricity capacity

The City of Ekurhuleni has received approval to procure about 2 400MW of new electricity generation capacity from independent power producers (IPPs), a move expected to attract billions in investment and reduce its reliance on Eskom.

Electricity and Energy Minister Dr Kgosientsho Ramokgopa and Ekurhuleni Mayor Nkosindiphile Xhakaza announced the development during a media briefing in Pretoria on Monday, October 19.

The approval follows a Ministerial Determination under Section 34 of the Electricity Regulation Act, allowing the metro to procure electricity from various independent producers.

The planned energy mix includes 1 237MW of solar photovoltaic (PV) power, comprising 1 137MW of embedded generation in Ekurhuleni, 780MW of natural gas, including 535MW to be wheeled, 183MW of waste-to-energy and 200MW for innovative energy technologies.

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Ramokgopa said Ekurhuleni was the first municipality to apply for a Ministerial Determination of this scale, noting that its proposed capacity exceeded the allocations previously approved for the City of eThekwini and the City of Cape Town.

“This is monumental in several ways. First, the City of Ekurhuleni is the first one to make an application for a Ministerial Determination,” he said.

He added that the proposed 2 400MW capacity was significantly larger than the 400MW approved for eThekwini and the 220MW for Cape Town.

According to Ramokgopa, the programme could reduce Ekurhuleni’s dependence on Eskom, although the metro would remain connected to the national electricity grid.

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He said the initiative supported the government’s efforts to strengthen energy security, create sufficient capacity for economic growth and improve electricity affordability through renewable energy supported by reliable, dispatchable generation.

Xhakaza said the programme was expected to attract approximately R6.2b in infrastructure investment and create employment opportunities.

The mayor said the City was working towards beginning construction on some projects before the end of the week, adding that the municipality would need to ensure the programme delivered measurable benefits to residents and businesses.

The City estimates that the IPP programme could generate about R36b in savings on bulk electricity costs over 20 years.

Xhakaza said the projected savings could help reduce electricity costs for households and businesses while easing pressure on municipal finances.

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He illustrated the potential impact by referring to an electricity tariff of R3 per unit, saying a reduction of up to 31% could bring the cost down to about R2 per unit.

He added that lower electricity costs could benefit households consuming around 500kWh a month, as well as industrial and commercial users.

The City said it would now focus on moving the programme towards construction, electricity generation, job creation and tangible benefits for communities.