Cape Town Set to Issue Largest Power Tender Yet: 500 MW for Load-Shedding Protection

Cape Town’s Mayor, Geordin Hill-Lewis, has announced the City’s plan to issue its largest load-shedding protection tender to date. This 500 MW dispatchable energy tender is a critical component in the plan to shield residents from the first four stages of Eskom’s load-shedding within the next three years.

The Key Takeaways:

• Largest power purchase tender in Cape Town’s history to be issued on 6 April 2023
• Cape Town aims to be the first metro to break free from Eskom’s hold
• Plan to offer protection from the first four stages of load-shedding within three years
• Tender focuses on dispatchable technologies, such as gas-to-power and battery storage
• Successful bidders will enter into 10-year Power Purchase Agreements (PPAs)
• Building Hope Budget includes a R2.3bn end load-shedding plan over three years

The 500 MW Dispatchable Tender:

The City is inviting competitive proposals from potential independent power producers (IPPs) to purchase electricity from power generation plants utilizing dispatchable technologies. This includes gas-to-power and battery storage options. The power sources must:

• Generate power for a significant portion of the day
• Support the City’s load-shedding protection efforts
• Not be located in a City-supply area

Multiple bidders may be awarded contracts under this program, which will involve 10-year Power Purchase Agreements with the City.

Building Hope Budget:

On 29 March, Mayor Hill-Lewis presented the City’s “Building Hope” Budget for public comment. This budget includes a R2.3bn end load-shedding plan over three years, featuring:

• R220m to buy power on the open market
• R288m for the Power Heroes voluntary energy savings incentive scheme
• R1bn to operate Steenbras Hydro Pumped Storage Scheme
• R53m in “cash for power” payments for solar power from residents and businesses
• R640m on City-owned solar plants
• R50m in battery storage technology

Progress on Load-Shedding Protection Plan Components:

1. Phase 1 of the 200 MW renewable energy from IPPs tender: Contracts remain on track for final awarding within 2023.
2. Power Heroes Programme tender: Preferred bidder contracts to be awarded in April. This initiative offers incentives for residents to save energy voluntarily through third parties, including automated remote switching off of power-intensive devices during peak times.
3. Cash for Power feed-in tariff: Increased by 10.15% for 2023/24, plus 25c per kWh incentive. Cape Town is the first city in the country to offer cash for excess rooftop solar power from households and businesses.
4. Request for Information on energy trading solutions: Issued to support the City’s load-shedding protection program, including market operation and underwriting services, energy aggregation services, and other related energy trading platform services.

Cape Town is the first metro in South Africa to embark on this innovative and technologically-forward initiative, positioning the city as a beacon of hope and a model for what can be achieved in the country.