The Western Cape government has launched its three-year Municipal Energy Resilience (MER) project to assist municipalities to take advantage of the new energy regulations, which may include buying energy directly from independent power producers (IPPs).
The project is part of the provincial government's plans to create an energy secure future in the Western Cape.
To support the MER project, two bids have been advertised in the government tender bulletin on November 20 and all applicable parties are invited to apply.
The MER project will help municipalities across the province understand the requirements of the new national energy regulations and mitigate related risks, as well as provide for network and operational capacity requirements for energy project development and procurement by municipalities.
The project will be implemented by the government’s green economy unit at the Department of Economic Development and Tourism, which is working in collaboration with the Department of Local Government and Provincial Treasury to enable the development of energy projects and engage with municipalities on multiple fronts.
However, the provincial government notes that the procurement of energy at utility and municipal distribution scale – such as bulk energy purchases from IPPs – under conditions of developing and evolving policies and regulations is a complex and challenging task. This is because municipalities may not have the policies, plans, resources, funding or procurement expertise to procure wholesale electricity from sources other than Eskom.
Neither have all municipalities’ electricity distribution systems been technically evaluated to clarify their readiness to support new electricity generation and energy trading.
To meet these demands, the MER project is structured in three phases, with the first involving the identification of potential candidate municipalities and pioneering projects and the development of a roadmap for rolling these out. The work will explore multiple new renewable energy technologies and scales, cost options, investment required, location issues, risks, municipal readiness needs, infrastructure needs, timelines to get capacity onto the grid, transaction and procurement mechanisms and regulatory issues.
Phase 2 will focus on starting the implementation of the energy projects in the identified candidate municipalities along with working with municipalities to help fill gaps to enable future energy project implementation.
Phase 3 will involve the development of a master plan for energy projects to be rolled out in municipalities along with the commencement of energy projects in further municipalities as budget allows.
While the Western Cape government acknowledges that only a few municipalities are likely to be able to procure utility-scale energy from IPPs in the near term, it also notes that there are other energy generation and storage opportunities that may serve to improve municipal energy resilience and future economic growth in the Western Cape.
Energy resilience-related work that is already being undertaken by the Western Cape government’s green economy unit and that will continue, includes support to municipalities to develop and revise small-scale embedded generation feed-in tariff frameworks and feed-in tariffs.
It also includes engagement with businesses to drive take-up of rooftop solar photovoltaic, support to municipalities to enable wheeling on their grid, support to energy sector businesses and the provision of energy technology and cost options to businesses and municipalities, and support to green economy investors in the Western Cape.