Cape Town to Launch Power Tender in Largest Bid Yet to Escape Eskom

Cape Town is planning to reduce its reliance on the national power utility by holding a tender next month for the provision of up to 1,000 megawatts of power to the municipality. This is the biggest attempt yet by the city to reduce its dependence on the struggling utility.

The government is seeking power that can be supplied on demand, in order to alleviate the country's worsening energy crisis. This comes as state-owned Eskom Holdings SOC Ltd. struggles to meet demand and imposes record blackouts.

Mayor Geordin-Hill Lewis has set the municipality a target of reducing the impact of outages, known in South Africa as load shedding, by four stages initially, Kadri Nassiep, the city’s executive director of energy and climate change, said in an interview on Wednesday. Eskom imposes outages in numbered stages, with each one equating to 1,000 megawatts of national demand. Cape Town’s aim is to avoid outages in the first four stages by using its own supplies.

Cape Town is following in the footsteps of other municipalities who have passed legislation allowing them to buy electricity from providers other than Eskom. This move comes as Eskom continues to struggle to meet demand, leaving many businesses and households without power. By diversifying its energy sources, Cape Town can help ensure a more reliable and affordable supply of electricity for its residents.

Cape Town has already held a tender for the supply of 200 megawatts of electricity from plants within the municipal boundaries and is evaluating bids. The upcoming tender will look at bids for supply from all technologies, including gas and solar plants if coupled with battery storage, that can supply power on demand.

According to Nassiep, Cape Town requires a peak supply of 1,800 megawatts in winter and 1,500 megawatts in summer. Each loadshedding stage amounts to 60 megawatts in the colder months and 45 megawatts in summer.

The city has also announced plans to buy surplus power from solar panels at residential and commercial premises and implement demand-response programs that would switch off water heaters remotely in times of high consumption. This would help to reduce the city's overall energy consumption and costs.

The city's power supply will come under pressure in the coming months when it partially closes its 180-megawatt Steenbras hydropower plant for a refurbishment project. The project is expected to cost about 1 billion rand ($59 million) and last two years. The program will be done in two stages, so not all the power will be lost.

Johannesburg is taking action to improve its power supply, Mayor Mpho Phalatse said on Thursday. The city is recommissioning two idled gas-fired plants to add 74 megawatts to the grid and is seeking the supply of 500 megawatts of power. This is in addition to the plans already in place in Cape Town to secure power.

This story was produced with the help of Bloomberg Automation.