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City of Tshwane pushing ahead with plan to procure 1 000 MW by 2026

Executive Mayor of Tshwane Cilliers Brink

Executive Mayor of Tshwane Cilliers Brink

19th June 2024

By: Terence Creamer

Creamer Media Editor

     

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The City of Tshwane is signalling its intention to proceed with plans to procure and/or revive 1 000 MW of electricity generation capacity by 2026 as part of a strategy aimed at improving security of supply and reducing its dependency on Eskom.

Executive Mayor Cilliers Brink told delegates attending the inaugural Tshwane Energy Summit that the city was seeking to find a way to partner with independent power producers (IPPs), as it was not in a financial position to pursue generation projects on its own.

The strategy being canvassed includes an aspiration to revive generation at the mothballed Pretoria West and Rooiwal coal station sites, where 40-year leases are being proposed, while also pursuing utility-scale renewables generation on greenfield sites within the metropolitan area.

In February, the city issued a request for information to gauge the appetite of IPPs to build alternative and renewable-energy projects and it recently completed an evaluation of the responses, which would be used when drafting a request for proposals (RFP).

It is also in the process of securing the services of a transaction adviser to oversee the prospects of reviving generation from the Pretoria West and Rooiwal sites; transactions that were likely to be far more complex.

This includes a potentially controversial plan for restarting coal generation at Rooiwal, which had a nameplate of 300 MW when it was completed in the early 1970s and where the city argues much of the core infrastructure remains intact, even though the station has not operated for some ten years.

Prospects for a resumption of coal generation at the even older and fire-damaged Pretoria West plant were more remote, with Brink acknowledging that the key asset at both sites was their proximity to the grid networks capable of evacuating power.

The city will, thus, be guided by both the transaction adviser, the appointment of which could be made in August, and the market, with regard to technology options, before issuing an RFP.

“We don't want to restrict the solution upfront. We want to say, this is our infrastructure and be guided by the transaction adviser so that we get the optimal uptake from the market,” Brink told Engineering News on the sidelines of the summit.

It is also possible, therefore, that the RFP for greenfield renewable-energy projects will be released separately and in advance of the RFP for Pretoria West and Rooiwal.

No clarity was provided about the potential financial model other than it being tariff-funded, nor whether there was any prospect of Tshwane offering any power purchase agreement guarantees, which have underpinned all the renewables projects procured by national government to date.

Brink acknowledged that the city’s procurement ambitions would have to be coupled with supportive policy in the form of a new wheeling framework, which delegates indicated would help lower the risk by allowing IPPs to contract with multiple customers, rather than a financially unstable single buyer.

Recognising this constraint, the executive mayor stressed that his first priority remained the “financial rescue of the city”, with a project management office having been set up to collect R6-billion of its R23-billion in outstanding debts in the near term.

“As much as we say we want to become independent of Eskom we understand that in order for us to have a meaningful relationship with IPPs, we also have to restore our own credibility, our own creditworthiness and our financial position.”

Besides procuring new utility-scale generation, work is also under way to review Tshwane’s feed-in tariff with the aim of making it more attractive to business and household prosumers to sell into the grid following a recent surge in rooftop installations across the region.

The role of prosumers and embedded generators will also feature in a city-level integrated resource plan currently being developed by the Council for Scientific and Industrial Research, which is headquartered in Tshwane. 

Edited by Creamer Media Reporter

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