Bright idea: Cape Town to pay cash for energy fed into the grid

The City of Cape Town is going to pay cash for energy fed into the grid in a groundbreaking initiative aimed at defeating load-shedding.

“We want to buy as much as we possibly can,” mayor Geordin Hill-Lewis said at a briefing  on Monday. “We are getting on with our own plan so we can be the first to end load- shedding.”

The new scheme involves buying renewable energy from private customers, initially commercial and later residential, to be fed into the grid to supplement the electricity supply.

To date the city has incentivised customers feeding supplementary energy into the grid by reducing their utility bills but now it is going a step further and will pay for surplus power.

To achieve this, the city has applied for a long-term exemption from national government, but is also tweaking its own local government regulatory framework to circumvent normal public procurement processes.

Hill-Lewis said the system was necessary in light of Eskom’s inadequate supply and the prospect of load-shedding long into the future. He did not expect the national load-shedding situation to improve within the next five years at least.

“I don’t think that will be the case [improvement within the next five years] — that’s why we’re doing this.”

Figures presented at Monday’s briefing showed the city could increase its feed-in supply by 90% just by incorporating the existing list of commercial applicants. 

The scheme will start with commercial customers due to the potential for them to generate more electricity via solar installations on large roof areas. However, potential residential clients have been invited to register their interest, and could be added to the system before the end of the year.

The initial buy-in rate is R1.01 per unit, though the price could rise as the city moves towards deregulating the market and allowing third parties to buy energy for resale.

“There is no upper limit — we want to try to get as much [energy] as we can,” said Hill-Lewis.

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