In his Budget 2021 Address in the Provincial Parliament David Maynier, Western Cape Minister of Finance and Economic Opportunities announced: “We will spend R48.8 million over the medium term and provide a further R20 million in the provincial reserves for the Municipal Energy Resilience (MER) Project in the Western Cape.”
The first phase of the MER Project in this financial year is: Drakenstein Municipality; Mossel Bay Municipality; Overstrand Municipality; Saldanha Bay Municipality; Stellenbosch Municipality; and Swartland Municipality. These six candidate municipalities in the province will move off of Eskom’s grid in favour of other power options as they are a municipality that has already done excellent work on developing energy resilience. The provincial government said that it will also be collaborating with the City of Cape Town on the project.
Load shedding costs the economy about R75 million per stage, per day in the Western Cape. “When it comes to the economy Covid-19 is a ‘left hook’, and load shedding is a ‘right hook’, which together often results in a knock-out blow that risks compromising economic recovery.
“Which is why we launched the three-year MER Project last year to support municipalities to take advantage of the new energy regulations to generate, procure and sell their own power so that we can become more energy secure in the Western Cape,” Maynier said.
“The MER Project is spearheaded by our Green Economy unit at the Department of Economic Development and Tourism, who are working in collaboration with the Department of Local Government and Provincial Treasury to enable the development of energy projects and engage with municipalities on multiple fronts.
The procurement of energy at utility and municipal distribution scale, such as bulk energy purchases from Independent Power Producers (IPPs), under conditions of developing and evolving policies and regulations is a complex and challenging task. Municipalities may not have the policies, plans, resources, funding, or procurement expertise to procure wholesale electricity from sources other than Eskom, specifically IPPs. Neither have all municipalities’ electricity distribution systems been technically evaluated to clarify their readiness to support new electricity generation and energy trading. Any learnings from projects implemented with the candidate municipalities will be applied to future projects in other municipalities.
While this project should enable municipalities to be able to buffer residents and businesses from the impacts of load shedding, they will still continue to be connected to the national grid as we won’t be able to meet 100 per cent of energy demand through renewable energy at this stage. “We will also work closely with national government to explore how the new energy regulations could lead to renewable energy generation projects within municipalities in the Western Cape.”