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STATEMENT BY THE CITY’S EXECUTIVE MAYOR, PATRICIA DE LILLE

The City of Cape Town is demanding that the Minister of Energy, Tina Joemat-Pettersson, allows us to procure renewable energy from Independent Power Producers (IPPs) in light of Eskom’s decision not to do so.

We will not sit back passively waiting to be crippled by Eskom’s decision especially amid rapidly escalating electricity prices.

I wrote to the Minister of Energy in November last year asking for what is termed a Section 34 determination to allow us to procure 150 MW solar energy and 280 MW of wind energy from IPPs.

The City wants to be able to purchase renewable energy because, as a responsible government, we have to ensure that Cape Town works and that we put the needs of our residents and economy first.If we are allowed to procure renewable energy, we can reduce the long-term electricity costs for our residents and provide a greater measure of protection against energy insecurity and Eskom’s load shedding.

Our outdated electricity regime forces us to be wholly dependent on Eskom for our energy requirements.

The time has come to restructure the entire South African electricity industry and break the vertical monopoly status that Eskom has enjoyed and enriched themselves with while South Africa’s consumers and our economy have suffered.

Why won’t the Minister and Eskom realise that this model of a national monopoly utility is breaking down across the world and that we need to move to a system which can bring down costs and provide greater energy security?

Last week I was shocked to read that Eskom is no longer interested in procuring renewable energy from the successful bidders which came through the government’s Renewable Energy Independent Power Producers Programme (REIPPP).

It is extremely worrying that Eskom is now choosing to forego what is, in many instances, the cheapest form of new electricity generation.

The price for all renewables has fallen dramatically – such that wind energy is now far cheaper than new coal-fired generation.

An example of the growth of this industry is the 12 000 m² in size wind tower mast production facility of GRI Wind Steel South Africa which is situated in the City-enabled Green Technology Industrial Park in Atlantis.

This R300 million investment means that wind towers are produced locally thereby providing jobs and a diversification of energy mix.

Eskom’s refusal to buy this cheaper source of energy could lead to it being forced to procure energy from far more expensive options such as nuclear power, which will have a knock-on effect of much higher electricity prices for South African consumers.

This, once again, confirms that Eskom is determined to entrench its monopoly status and views the R193 billion private investment that has flowed into renewable energy as a threat to this status.

Whose interest do they actually serve or do they merely want to secure more hefty bonuses for their big bosses in years to come?

For the sake of our country’s economy, the entire electricity regime needs to be urgently restructured. Unlike Eskom, the City is ready to be part of that change and move towards a low carbon, diversified and decentralised energy system.

We call on other metros in South Africa to put politics aside and to join us in lobbying for much-needed changes to our outdated electricity regime.

As the economic centres of our country, we should come together in forcing the Minister of Energy to allow us to procure the energy that Eskom is refusing to take up.

The City has attracted a number of renewable energy companies to our economy that are manufacturing the components for renewable energy projects around the country.

There is also increasing interest from a number of new companies that want to manufacture these components.

It is, therefore, imperative that on a national level, clear signals are sent to this market to ensure that investment flows continue. This will create more jobs and will ensure that we have a secure and affordable energy system.

Any opposition to this is nonsensical.

Following my letter to the Minister of Energy in 2015, we answered numerous queries relating to our request. We followed up with another letter to the Minister in February 2016, pushing her for a response.

We still have received no response from the Minister and we are demanding that response now.

The City will not accept this lack of a response. Should we not receive a positive response, we are considering all our options to secure our right to take control of our energy future, including possible legal action.

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