LANGEBERG MUNICIPALITY’S PLAN FOR LONG-TERM ENERGY SUSTAINABILITY
Following a council decision, Langeberg municipality has now commenced with a public participation process to allow the public to comment on the ENERGY OUTLOOK AND ALTERNATIVE GENERATION IN LANGEBERG.
With Eskom unable to meet its demand, municipalities need to secure self-generation and alternative energy sources to supplement the energy deficit. Council have approved the appointment of a team of experts (transactional advisors) to assist the municipality with the technical -, financial – , environmental – and legal advice with the process of procuring alternative energy. Any recommendations from this team will be submitted to council for consideration and approval.
With the promulgation of the amendments to the New Generation Capacity Regulations in terms of the Electricity Regulation Act, Act 4 of 2006, as amended on 16 October 2020 municipalities have the authority to produce power. This can be done by generating own electricity and / or purchasing electricity from independent power producers (IPPs).
The legal framework for procurement of new generation energy capacity by municipalities was developed by National Treasury, Department of Mineral Resources and Energy, Energy Regulator and SALGA to assist municipalities with guidelines on how they may procure, buy, sell and generate electricity. National Treasury published Circular No. 118 in terms of the Municipal Finance Management Act, Act No. 56 of 2003, in June 2022 to provide advice to municipalities and municipal entities, relating to the legal framework for procurement of new generation energy capacity, particularly from renewable energy sources, within the provision of the Constitution, MFMA and other related legislation.
The likely scenario for procuring alternative energy will be Municipal IPP procurement program where Independent Power Producers’s will bid for projects that are located on a non-municipal site and the municipality does not take any site or development risks (scenario 2 as outlined in the Council Resolution A4410)
Some of the technologies to consider are: Solar PV generation, Concentrated Solar, Wind, Battery Energy Storage System (BESS), Hydro, Gas / Diesel generation, Hydrogen generation and Biomass / Biogas generation
The technical considerations that adds to the complexity of alternative energy are the feed-in points, base generation demand & capacity, possible peak shaving, load shedding and energy efficiency.
Langeberg Municipality will aim to procure alternative energy from Independent Power Producers by 2026.
Wheeling electricity is a good alternative
The method of ‘wheeling electricity’ on municipality grid is where private operators at one location can supply electricity to a buyer or off-taker in another location via the municipal network. By wheeling electricity through the municipal grid to businesses and individuals, it
- encourages and attracts renewable energy investment,
- creates competition in the energy market that could drive down prices and give customers more choice
- and establishes a business-friendly environment for local businesses and residents,
- creates another revenue stream for the municipality.
George Municipality is conducting a pilot project for wheeling that will pave the way in terms of adopting policy and tariffs for implementation in other municipalities. Electricity wheeling could be introduced as soon as 2024.
“Wheeling and electricity trading will be a key part of South Africa’s energy mix in the future. We trust this growth will create an economic environment that not only attracts investment, but allows businesses to grow and develop,” says Mr Lotter, Manager of Electrical Engineering Services.
How will this impact electrical supply tariffs?
With the new energy mix, the tariffs structures will have to be revised. This means that any cost benefit from the procurement of alternative energy could be passed on to the consumer. The National Energy Regulator of South Africa (NERSA) requires a cost of supply study to be done before Municipal tariffs can be adjusted. It is recommended that budget be made available to appoint an expert consultant to conduct the cost of supply study and calculate revised tariffs.
Electrical Master Plan to address the supply and demand shortage
Langeberg Municipality have updated its Electrical Master Plan per town in June 2022. Our electrical load profile indicates a continuous growth in all towns of Langeberg Municipality with potential new developments requiring approximately 21.5MVA. The demand for electrical capacity will exceed the supply from 2024/2025 which will slow development and growth; all the more reason to procure energy from alternative sources. The Robertson network demand is already exceeding the supply.
The Master Plan proposes major capital projects required to keep the electrical network operational and to increase network capacity (as per the available budget).
The Municipality is in the process of procuring the last available capacity on Eskom network that supplies Langeberg (3MVA) at a cost of approx. R17 million. The Eskom corridor that supplies electricity to Langeberg is constrained and any future capacity will require the Bacchus-Klipdrif 132kV line to be upgraded. Eskom plans this project in the 5 to 10-year horizon and it could cost in excess of R200 million.
We still rely on Eskom to supply the approx. 75MVA of electricity required to power Langeberg Municipality in peak demand season (around February and March.)
Private / Commercial / Industrial / Agricultural Alternative Generation
In terms of generating alternative electricity at your private, commercial or agricultural property, council approved Guidelines for Small Scale Embedded Generation in Feb 2018.
As the Alternative Energy (AE) industry & technology evolved Langeberg Municipality has made great strides for all municipal customers wishing to install alternative electrical generation. Council approved
- Updated requirements,
- New, simplified application form and
- An updated contract agreement
View the applicable documents at the Langeberg Municipal website (Click on the below documents) from 04 November 2022 for the local community and interested persons to submit comments by 11 December 2022.
- pdf A4410: LEGAL FRAMEWORK FOR PROCUREMENT OF NEW GENERATION ENERGY CAPACITY BY MUNICIPALITIES (National Treasury Circular 118 in terms of MFMA in June 2022) (862 KB)
- pdf A4411: ELECTRICAL MASTER PLAN (685 KB)
- pdf A4412: ACTION PLAN TO PRODUCE ENERGY (795 KB)
- pdf A4415: ALTERNATIVE ELECTRICAL GENERATION (2.51 MB)