Ekurhuleni wins 2400MW power deal, and residents could see bills cut by up to 31%

Ekurhuleni has been cleared to buy 2400MW of new generation capacity from independent power producers after a Ministerial Determination under Section 34 of the Electricity Regulation Act, Electricity and Energy Minister Kgosientsho Ramokgopa announced on Monday.

Ramokgopa, briefing the media in Pretoria alongside City of Ekurhuleni Mayor Nkosindiphile Xhakaza, said the metro is the first municipality to make an application for a Ministerial Determination. He said the process took longer than usual because of the size of the application and the make-up of the energy mix.

The mix is 1237MW of solar photovoltaic, of which 1137MW is embedded generation in Ekurhuleni, 780MW of natural gas of which 535MW is wheeled, 183MW of waste-to-energy and 200MW directed towards innovative energy technologies.

Ramokgopa put the scale in context against earlier determinations. “eThekwini was 400MW, the City of Cape Town was 220MW. This is at a different scale,” he said. “What this does, potentially, is to free Ekurhuleni from total dependence [on] Eskom. Of course it will continue to be grid-tied.”

For residents, the mayor’s numbers are the ones that will be read closely. Xhakaza said the city estimates the IPP programme will attract approximately R6.2 billion in infrastructure investment and could generate some R36 billion in savings over 20 years on bulk electricity.

He translated that into a unit price. “It means.communities who are paying R3 per unit now will save up to 31%. That could be about R2 per unit. It means households that consume about 500KW per month would cost R1500 at R3. With this saving, it means you pay up to R100 per month. That’s a R500 saving,” he said, adding that industry would also realise savings.

Those are the city’s projections rather than confirmed tariffs, and the source material does not set out how or when they would reach household bills.

Xhakaza said the programme is expected to create jobs and that the city is working towards sod turning on some projects before the end of this week. “Our responsibility is to ensure that these projects translate into real economic opportunities and measurable benefits for our communities,” he said.

Ramokgopa framed the determination as part of building generation headroom for economic growth and pushing towards affordable electricity as the country moves further into renewables backed by dispatchable generation. He said the move demonstrates government’s commitment to energy security, particularly in the context of geopolitics.

On the mayor’s figures, the projected savings could ease pressure on municipal finances and help protect residents and businesses from some of the effects of rising electricity costs, Xhakaza said. “We now look forward to translating this process into construction, electricity generation, employment and tangible benefits to our communities.”

This report is based on the SAnews (South African Government News Agency) account of the briefing, which summarises the announcement rather than reproducing the determination itself. The determination’s conditions and timelines are not set out in that account. The original is at https://www.sanews.gov.za/south-africa/ekurhuleni-receives-go-ahead-procure-2400-mw-ipps.