Big breakthrough: Some municipalities can now generate their own electricity

Business Insider SA
Scatec Solar
(Supplied: Scatec Solar)


  • Government gazetted changes that will now allow municipalities to generate their own electricity.
  • Only municipalities in good financial standing will be allowed to do this.
  • Cape Town and  Ekurhuleni may be the first in line.
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In a major shift in South Africa’s electricity landscape, some municipalities are now allowed to procure their own electricity, side-stepping Eskom.

This after government gazetted changes to South Africa’s Electricity Regulations on New Generation Capacity legislation on Friday.

The new regulations require municipalities to apply to the minister of mineral resources and energy to “procure or buy new generation capacity in accordance with the Integrated Resource Plan”.

One industry expert told Business Insider that this wording was somewhat confusing, but is believed to include both generating their own power, and buying power directly from independent power providers.

In the past, municipalities were forced to buy all of their electricity from Eskom.

The new regulations demand that municipalities comply with various requirements, including that they must submit feasibility studies about the projects.

READ | These large new wind and solar projects will deliver electricity from this month

Only municipalities that are in “good financial standing” will be allowed to buy or generate their own electricity. This will be the vast minority of local municipalities - only 8% of municipalities received a clean audit in the past year.

But among those were the cities of Cape Town and Ekurhuleni, and both have big plans for procuring their own electricity.

The City of Ekurhuleni previously installed its own generation plants, including a landfill gas project and several rooftop PV plants. It is planning to produce its own electricity at scale, as well as procuring some 680MW generated from the various [renewable energy] sources, mainly solar, [waste to electricity], the municipality previously told Business Insider.

The City of Cape Town has been putting pressure on government to allow municipalities freedom to plan their own energy systems for some time, resorting to the courts in an attempt to procure electricity from independent power producers.

The Department of Mineral Resources and Energy says on Friday that it is putting in place an "internal standard operating procedure" to ensure that the requests for new power generation are attended to in the shortest possible time. 

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