June 7, 2023
Cape Town’s mayor, Geordin Hill-Lewis, has unveiled a revolutionary energy initiative that will see Amazon and 14 other companies delivering self-generated power via the city’s grid. The city council is expected to sanction the scheme later this month, following the mayoral committee’s approval.
Understanding Electricity Wheeling
Electricity wheeling – the process enabling businesses to buy and sell power amongst each other using the existing grid – offers a promising alternative to the main supplier’s energy. This scheme opens up the opportunity to utilize remotely generated electricity, including lower-cost solar and wind energy, and bypasses the time-consuming steps of new permit acquisition and environmental impact studies.
Moving Forward with the Pilot Program
Last year, the city of Cape Town called for applicants for a wheeling pilot program, from which 15 participants were chosen. This group represents 25 generators and 40 customers.
The electricity will be transmitted over the Cape Town municipal and Eskom distribution networks. Anticipation is high, as the city expects the first electricity transaction under this program to take place in July 2023.
The 15 participants chosen for the pilot program are:
- Amazon Data Service South Africa (Pty) Ltd
- Brinmar Private Energy Trading South Africa
- Distributed Power Africa (Pty) Ltd
- Energy Exchange of Southern Africa (Pty) Ltd
- Energy Partners Utilities (RF) (Pty) Ltd
- EnerJ Carbon Management
- Enpower Trading (Pty) Ltd
- Floating Solar (Pty) Ltd
- Make a Difference Ventures GP LLC.
- NEURA Trading (Pty) Ltd
- Phofu Solar Plant (RF) (Pty) Ltd
- POWERX Proprietary Limited
- Redefine Properties Limited
- Solar Africa Energy (Pty) Ltd
- Swish Property Seven (Pty) Ltd
Amazon, which has a significant presence in Cape Town and is building a new African headquarters, already uses a 10MW solar power plant in the Northern Cape to supplement its energy needs.
Paving the Way for Energy Freedom
Despite the complexity of this pioneering initiative, the city says it has reached “the business end” of the pilot, having developed the necessary billing engine and completed wheeling agreements.
This energy trading scheme is part of Cape Town’s broader mission to liberalize its electricity market and mitigate load-shedding. Other initiatives include procuring 700MW of private power and incentivizing residents and businesses with cash for surplus electricity fed back into the grid.
Cape Town’s committee member for energy, Beverley van Reenen, highlighted that energy sales will be guided by market dynamics, with the energy price set by the trading parties, not by the city, Eskom, or the National Energy Regulator of South Africa (Nersa).
This initiative certainly looks like a bright step forward for Cape Town, positioning it at the forefront of innovative and sustainable energy practices.