Metro's novel power plan

IN A bid to increase private sector investment in Nelson Mandela Bay, the municipality has introduced an innovative electricity trading model which will allow users of renewable energy systems to sell their excess power generated to environmentally conscious consumers.

Nelson Mandela Bay last month became the first municipality in South Africa to allow households and businesses to connect their electricity-generating systems to the power grid.

According to the agreement between the municipality and National Energy Regulator of South Africa (Nersa), the household or business's monthly electricity bill is then credited to the value of the electricity they feed into the grid.

The partnership allows for household or business renewable energy systems of up to 100kW to connect to the national electricity grid.

Municipal acting executive director for electricity and energy Peter Neilson said the deal did not allow for the municipality to buy any excess power generated by these systems.

"The best we could do was credit an account to zero, but this limitation often takes away from the bankability of the project. So to try to facilitate more of a green economy sector we entered into an agreement with Amatola Green Power, an electricity trading company which operates independently."

He said the agreement would allow Amatola to feed excess power produced by green energy systems back into the grid, which the company could then sell to a third party consumer.

"The benefit for the one producing the electricity is that they recover that value they spent in the renewable energy system that much faster.

"The hope is that this will entice more private-sector investment in the metro if companies see they can sell excess green power that they generate."

Neilson said consumers who were environmentally conscious and wanted to contribute to offsetting climate change would be keen to purchase the "green" power.

"We signed this non-exclusive agreement with them because they were the only company with a green energy trading licence from Nersa," Neilson said.

Amatola Green Power shareholder John McGillivray said the company had obtained its green energy trading licence in 2009 and was very excited about the opportunity.

"We trade with a voluntary market of willing buyer, willing seller.

"We rent networks from Eskom and the municipality for a fee and then buy physical energy from green power producers and sell directly to the customer. The produced power goes into the network and gets monitored," he said.

Consumers had the option of using only green power or a combination of green and "brown power". McGillivray said green power being produced by Coega's wind farm was already being sold to consumers.

He said 14 consumers were already purchasing green power in the metro and a further 70 were involved in various forms of negotiation.

Households or firms interested in becoming generators must enter into an agreement with Amatola.

McGillivray said generators' profiles were then matched with willing consumers, based on the type of system and energy needs.

"The generator invoices Amatola and Amatola invoices the customer.

"We are also looking at allowing prepaid electricity users the option of purchasing green power."

McGillivray said the cost varied and depended on the type of system – whether it was solar, wind or biomass.

"For instance if the generator is industrial they already get electricity at a cheaper rate."