IF Cape Town procured its own power from IPPs, it could revive the Atlantis economy, says Finance and Economic Opportunities MEC David Maynier. Picture: Henk Kruger/African News Agency (ANA)
IF Cape Town procured its own power from IPPs, it could revive the Atlantis economy, says Finance and Economic Opportunities MEC David Maynier. Picture: Henk Kruger/African News Agency (ANA)

Maynier says new IPP deal could revive Atlantis, Cape’s green energy hub

By Mwangi Githathu Time of article published Sep 29, 2020

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Cape Town - Allowing Cape Town to procure electricity from independent power producers (IPPs) could revive the economy of Atlantis, which in 2018 was declared a special economic zone (SEZ) and identified as a green energy hub, says Finance and Economic Opportunities MEC David Maynier.

Maynier said the extent of the impact this would have depended on how quickly the different role-players gave effect to this policy, and the effectiveness with which a system for such contracting was put into place.

“It is critical that the national procurement of power from utility-scale IPPs goes ahead as set out in the national Integrated Resource Plan for Electricity, published for implementation in October 2019,” said Maynier.

Maynier was reacting to President Cyril Ramaphosa who, writing in his weekly letter to the nation yesterday, said: “Draft amendments to regulations that would enable municipalities in good standing to procure their own power from independent power producers will soon be gazetted.”

According to the Department of Trade, Industry and Competition, “SEZs are geographically designated areas set aside for specifically targeted economic activities used to attract foreign direct investment, alleviate large-scale unemployment, and develop and diversify exports.”

Mayco member for economic opportunities James Vos said: “IPPs and their associated value chains will play an important role in reviving the economy of Atlantis. A wide-ranging set of initiatives are in place to position Atlantis as a compelling destination. The City itself hosts a dedicated investment facilitation office in the Atlantis industrial area that supports both new investment and the needs of existing investors.”

Speaking about the number of jobs that could emerge in the Atlantis SEZ, SA Wind Energy Association chief executive Ntombifuthi Ntuli said the next decade would see the establishment on average of 17 new wind farms each year. “South Africa will see the local manufacturing sector helping to boost economic growth and job-creation. Tower manufacturing facilities are already set up around the country.

“The existing local tower manufacturing facility in Atlantis currently produces 150 towers per annum and MEC David Maynier has created 340 direct jobs and 200 indirect jobs. Therefore, manufacturing 640 towers locally can potentially create 1360 direct jobs and about 800 indirect jobs,” Ntuli said.

On the issue of IPPS selling power to municipalities, Ntuli said: “There are various ways that IPPs can transact with municipalities with the idea of selling power that will need to be explored. The first option is for IPPs to be selling directly to municipalities, in which case the consumer could connect directly to the municipality.

“The second option is that IPPs could be the municipality's virtual supplier from another point on the Eskom network. Third, IPPs could transact inside the municipalities through wheeling (transmission of electricity through transmission lines) to customers that are on the municipal system, where the municipality becomes the carrier and not the direct off-taker.

“Any of these off-take arrangements could work, particularly if Nersa (National Energy Regulator of SA) allows municipalities to establish a wheeling tariff.”

DA provincial spokesperson on Economic Development Deidré Baartman said: “The Atlantis SEZ, with its strong focus on green technology supported by the Western Cape, will be ideally positioned to benefit from this boost.”

“This commitment by the president to allowing municipalities in good standing to purchase power directly from independent power producers (IPPs) is the jolt which our renewable energy sector needs,” said Baartman.

“It follows a recent resolution unanimously adopted by the Western Cape Provincial Parliament to call on Energy Minister GwedeMantashe to urgently approve the City of Cape Town's application to purchase power directly from IPPs”

Secretary General of the Black Business Chamber (BBC) Mntuwekhaya Cishe said the BBC believes Atlantis SEZ is most suited for power generation also because of the new development that is coming in the area.

“As BBC we believe this will also help in creating job opportunities for the people of the area and surroundings.“However, systematic barriers have always made it difficult for participation of small businesses in general and black ones in particular, whenever such opportunities arise,” said Cishe.

“We are calling on President Ramaphosa and the government to ensure that the necessary environment is created for effective participation of small businesses throughout the value chain of independent power production.”

Cape Argus

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