The City of Cape Town has announced the launch of its electricity wheeling pilot which it says will help it diversify its electricity supply going forward.
Wheeling is a process where the electricity that is owned by a third-party supplier is ‘wheeled’ over Eskom and the city’s grid to the end consumer.
The customer pays the third-party supplier for the electricity wheeled and the city or Eskom charges for the transport of the electricity over the grid.
“As part of the pilot, an electricity wheeling facility will be offered to enable the wheeling of electricity to customers with a 11kV connection who want to buy energy from third-party suppliers that source the electricity from generators connected to Eskom or city electricity grids.
“A limited number of third party participants will help to investigate, test and finalise the wheeling facility. This will take place over a minimum of one year, and will end with the full implementation of the city’s wheeling facility,” said mayor Geordin Hill-Lewis.
Hill-Lewis added that the city was working on a number of initiatives to ensure the city moves away from Eskom and load shedding.
“In our draft energy budget, we have also set aside R15 million to pay for energy generated by small-scale embedded generators through the feed-in tariff of 75,51c/kWh (excluding VAT) and the 25c/kWh incentive offered for small-scale embedded generators.
“Changing the energy regime takes time, but we are fully committed to doing more to increase energy security to the benefit of Cape Town and its residents,” said Hill-Lewis.
Hill-Lewis noted the city has developed a standard set of rules to give effect to the pilot. He added that there is no room to negotiate wheeling tariffs or rules and the wheeling tariff has been designed to be revenue-neutral to the city.
“Systems also need to be developed to manage the metering data and financial calculations in terms of these rules. The city’s billing processes are also being changed to make wheeling possible. These rules and the systems need to be tested to ensure that they are working correctly before the city can offer wheeling. The city intends to do this testing together via the pilot.
The third parties will need to have generators with a capacity of more than 1 MW that can connect to the city’s grid, he said.
“The city is looking forward to collaborating with private partners and to make Cape Town stronger by increasing energy security, adding in more sustainable energy sources and positioning Cape Town as a leader in energy solutions for a growing city,” said the city’s mayoral committee member for energy Beverley van Reenen.
Joburg power plans
Joburg mayor Mpho Phalatse said that the city is looking at new strategies to combat the rising cost of power, as well as to safeguard the city’s power supply in the face of increased load shedding and international factors like Russia’s war with Ukraine.
“Our country has been grappling with several pressing questions regarding our energy future because energy impacts all spheres of our daily lives,” she said.
“Recently we have seen how geopolitical factors, mainly the war between Russia and Ukraine, have led to the rise in gas prices. On the local front, we have been warned to expect another high increase in the petrol price in June 2022 as the national government reinstates the levy on the fuel price.”
She said that the traditional power delivery model that the City of Johannesburg has been relying on, is being disrupted by technological developments related to new systems and that it cannot assume anymore that power will be solely generated by Eskom.
“Instead, more alternative energy models have come through and as the city, we are forced to recognize so-called embedded generation as a serious option,” she said.
She highlighted several power solutions, including:
For the City to be able to meet its energy requirements in the shortest possible time, very close collaboration is necessary with the private sector for the requisite investments to materialize.
“The City recognizes that we don’t have the funding to keep up with the required investment in power infrastructure, hence private-public partnerships are seen as the most feasible way forward.
“The power sector generally, including embedded generation, energy storage and smart grids could leverage huge investment in our city and enable us to create the jobs we desperately need,” she said.
Johannesburg needs R26 billion rand to stabilise its power supply, Phalatse said.
Upgrading townships and tackling crime
The upgrading of informal settlements would address the challenge of access to a modern thermal energy carrier, for cooking and space heating.
“Without this approach, residents in these informal settlements will continue to use environmentally harmful energy sources, like firewood and coal, thus degrading the air quality in these areas,” she said.
Phalatse said that not all power disruptions are caused by load shedding, and some are caused by deliberate and criminal damage to infrastructure. Cable theft is particularly problematic and needs to be tackled head-on. She said that tackling crime is also a priority for securing power infrastructure.
Gas and Associated Infrastructure
The lack of gas infrastructure with pipelines and storage facilities beyond what is provided by Egoli Gas and Sasol, has made it impossible for gas to feature as a major energy carrier in the City’s energy mix.
To expand the gas market for the residential, commercial, and industrial sectors as a key component of the City’s energy mix requires that infrastructure must be built in anticipation of the gas market.
“We are closely watching developments relating to the Gas Master Plan under development by national government. The prospect for gas to displace the utilization of electricity for cooking and space heating, is worthwhile given its cost-effectiveness and efficiency relative to electricity utilization for that end-use,” she said.
Renewables including Solar
To date South Africans across all municipalities have installed an estimated 200 MW of rooftop photovoltaic (PV) systems, according to the energy regulator NERSA. As wholesale electricity tariffs rise, more rooftop PV systems are expected to be installed.
“This threatens to reduce the City’s energy revenues, and we are best advised to take be proactive in providing alternative energy solutions for our residents. The adoption of storage technologies based on battery systems or other options, continues to grow as they become relatively cost-effective,” Phalatse said.
“Small scale embedded generation through biomass, biogas and municipal waste are areas holding great potential for creating a circular economy around waste management, but we have hardly seen investment of sizable quantity in that space. Technologies are available for these resources to be added to the generation mix at a small sub-utility scale.
“Given the number of sites operated by the City for processing waste, this potential energy source needs to be explored.
City Power has experience in procuring power from independent power producers like Kelvin Power. Whilst Kelvin Power is a fossil-fired power plant within the jurisdiction of the City, more clean-energy generators need to be procured to augment Eskom supply, Phalatse said.
“South Africa has all the requisite primary energy sources for this (Green Hydrogen) initiative, including an abundance of platinum and other catalysts necessary for hydrogen fuel cell development. We are therefore bullish about the hydrogen economy within the City.”
Whilst renewable energy technologies like wind and solar are very attractive due to their almost zero variable cost, criticisms generally refer to their inability to supply power continuously during the day and night and the difficulty of grid integration. City Power has started rolling out smart meters to some extent, as part of a platform for smart grid systems.
Smart grids comprise smart meters, smart appliances, renewable energy sources and energy-efficient sources to facilitate erstwhile impossible electricity load flows.