Cape Town signs first 70MW open-market solar power agreements

The City of Cape Town has concluded its first two long-term power purchase agreements with independent solar producers, securing 70 megawatts of electricity for the municipal grid.

The city said the agreements cover a 30MW plant in Atlantis operated by JEMPEC and a 40MW plant in Philippi operated by Make A Difference LLC. They form part of a competitive procurement programme through which Cape Town plans to buy up to 200MW from independent producers.

Mayor Geordin Hill-Lewis said Cape Town was the first South African metro to reduce its reliance on Eskom by purchasing power on the open market.

City projects savings against Eskom tariffs

According to the municipality, electricity bought under the agreements will be 19% to 21% cheaper than current Eskom rates. Future price increases will be linked to the consumer price index over the 20-year contract period.

The two agreements are expected to account for about R8 billion in power purchases over their full term. The municipality said all electricity supplied under the contracts must remain below Eskom rates throughout the 20 years.

Mayoral committee member for energy Xanthea Limberg said the projects were also expected to avoid nearly two million tonnes of carbon emissions. The city said this could generate tradeable carbon credits for further infrastructure investment.

Cape Town has been expanding several alternative-energy programmes. These include electricity wheeling across the municipal grid, cash and bill credits for residents and businesses that sell excess rooftop-solar power to the city, and the municipality's own solar and battery plant in Atlantis.

The city said more power purchase agreements would follow as it works towards procuring as much as 700MW of independent electricity over time.