Welcoming address to Africa Energy Indaba

2 March 2022

Two weeks ago, here at the CTICC, I had the honour of delivering the welcoming address at the inaugural Solar Power Africa conference. I used that opportunity to make a major announcement on behalf of the City of Cape Town. That week, we opened our first round of procurement of power from independent power producers.

In this first round, we are procuring several hundred megawatts of renewable energy. In due course, we will open further rounds of procurement which will give us access to dispatchable power. But I am not here today just to talk about IPPs.

I am going to take advantage of this opportunity to welcome you all to the Mother City by talking a bit about how the City of Cape Town is thinking about energy in general, and about electricity more specifically. Many of you will have heard me repeating the phrase “energy security” at every opportunity.

To most people in this room, energy security refers to the availability of resources for energy consumption in general, including gas and petroleum. As a municipality, however, our focus is chiefly on the delivery of electricity. Energy security — as it relates to electricity — is Cape Town’s goal. Independent power procurement is a crucial step towards this goal. It is, however, a difficult step in a country that did not prioritise energy security much sooner than it finally did.

In 2012, our national government admitted that no significant investment was made in the energy sector in the prior 20 years. At that time, the government was still hoping that the Medupi and Kusile stations would soon be brought online, and provide 9600MW of power to help restore energy security in SA. Ten years later, things look even less hopeful.

Medupi and Kusile have been besieged by technical failures, cost overruns, breakdowns and delays. In addition, at least six of our ageing coal-fired power stations will reach their decommissioning dates in the next ten years. It will not be financially viable to extend the life of these stations while adhering to global environmental standards.

South Africa faces a looming crisis of energy insecurity over the coming decades. Many parts of the continent at large face similar crises. This means suppressed economic growth and an inhibition on our ability to solve our most pressing moral problems: unemployment, poverty and inequality. For this reason, I am immensely grateful to each and every one of you for availing yourselves to come to this Indaba, and find innovative solutions to Africa’s energy issues. These are South Africa’s issues, and Cape Town’s issues, too.

We need courageous and urgent action. We need intelligence and innovation. We need deep understanding of the problems which have taken decades to develop, and fresh new ideas to solve them. These ideas will come from the people in this room, and I am so glad to welcome you to the Mother City.

In Cape Town, we have made it clear that we are ready to do what we can to achieve energy security as quickly and sustainably as possible. I want to spend a few minutes sketching this out for you. What does energy security mean to us, practically? It has two components. The first is reliability. Energy access must be consistent and trustworthy, and not prone to shortages or breakdowns. The second is affordability. Not only must the least well-off be able to access the energy they need, but businesses must also be able to keep their overhead costs down to operate profitably and drive growth.  A range of social goods — which are crucial to people’s safety — depend on these two components of energy security.

Everything in a modern state — from adequate transportation, to communications, healthcare, security, water and sanitation systems and access to food — ultimately depends on reliable and affordable energy. In December last year, a veld fire destroyed sections of several high-voltage lines, plunging the Cape Town CBD and surrounds into darkness for 27 hours.

A temporary solution was quickly put in place, but we needed a longer term solution to reduce the system’s vulnerability. A new cable has already been laid in a freshly-bored tunnel under the Black River, instead of hanging over it, where it is vulnerable to damage. We are also piloting new deterrent systems in our substations, and combatting cable theft through innovative technologies including drone monitoring.

On the other component of energy security, affordability, I have been a very vocal opponent of Eskom’s above-inflation increases in the price of electricity. Last week, Nersa awarded Eskom an almost 10% increase in the price of electricity. This was despite a petition (signed by tens of thousands of Capetonians) and detailed written and oral submissions from the City of Cape Town calling for the rejection of Eskom’s application for an increase.

Our message to Nersa was simple: Capetonians simply cannot afford above-inflation increases in the cost of electricity. Such increases are unfair, unaffordable and unjust. This remains our view. Electricity being prohibitively expensive affects the poor more than anyone else. Urgent action is needed to reduce the regressive effects of unaffordable power.

The City is working hard towards bringing down the cost of electricity over time through its IPP procurement project. This project will allow the City to purchase electricity from IPPs at a rate far below Eskom’s, and pass this saving on to its customers. But Cape Town can only do so much. The national government urgently needs to walk this road alongside us and take bold steps with us.

Minister Mantashe, I am happy to share a platform with you today. We saw each other only weeks ago and you were very supportive of the City’s plans to procure additional electricity. I want to thank you for your support and I want to reaffirm our commitment towards procuring additional electricity generation which will ease the pressure on Eskom too.

Finally, to the industry, I would like to say that I would welcome the opportunity to hear your critiques and ideas. If you think we are doing things wrong, tell us. If you have great ideas about how to solve the crisis we are facing, speak up.

Our goal is to make sure that every Capetonian has reliable and affordable access to the energy they need to live, run businesses, study, travel, and thrive. And we don’t want this tomorrow, we want it today.

We cannot wait any longer.

If you can help us achieve this goal of no load-shedding in Cape Town, of reliable and affordable electricity for all, my team and I very much want to hear from you.

Thank you for choosing Cape Town as the venue for your crucial discussions about energy security in South Africa and the continent, and I wish you every success over the remainder of your conference.

Issued by Greg Wagner, Spokesperson, City of Cape Town, 2 March 2022