Out-Law / Your Daily Need-To-Know

City of Johannesburg invites independent power producers to supply the city

Out-Law News | 21 Nov 2022 | 10:23 am | 1 min. read

The City of Johannesburg’s City Power has invited independent power producers to supply the city with excess energy through a programme of short-term power purchase agreements.

The request for proposals (RFP), published on 16 November, seeks to procure energy from various alternative energy sources. The RFP represents the first phase of the city’s independent power producer (IPP) programme. According to the RFP, the key objective of the programme is to secure additional short-term energy for a period up to 36 months from IPPs to help shield the residents of Johannesburg from ongoing loadshedding. 

City Power said it requires, among other things, the generation facility to be located within South Africa and the contracted capacity under the power purchase agreement to be at least 1MW. In total, City Power is looking to secure an additional generation capacity of about 500MW in order to bridge the gap of loadshedding and the demands by City Power’s customers.

Jurg van Dyk of Pinsent Masons said that the programme would allow City Power to secure excess generation capacity from diversified energy sources through short term power purchase agreements with the selected IPPs. “With the city of Johannesburg currently procuring around 90% of its energy from Eskom and the balance from Kelvin Power Station, the programme is welcomed as it demonstrates a real effort to achieve energy security within Johannesburg by moving away from the long-standing business model of obtaining the bulk of its energy from Eskom” van Dyk said.

The programme is being implemented concurrently with the city’s efforts to seek approval for ministerial determination to procure power on a longer-term basis from IPPs. The closing date for bid submission is 11am on 10 February 2023.

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