The City of Cape Town (CoCT) has signed two purchase agreements for a combined 70 MW of power, with more to follow in the coming months under a competitive tendering process for delivery of up to 200 MW of power.

The 20-year power purchase agreements (PPAs) are with solar plants that will be connected to the city’s grid in Atlantis (30 MW from Jempec), and Philippi (40 MW from Make A Difference).

Mayor Geordin Hill-Lewis says the city aims to buy  up to 200 MW from independent producers at rates cheaper than that of Eskom.

“Families cannot be expected to absorb endless Eskom price increases forever, which is why we are working to end reliance on expensive Eskom power to make electricity more affordable for Capetonians.

“We are pleased to have sealed the first two PPAs with solar plants here in Cape Town – a first for any South African city.”

CoCT says the two agreements will see the city save 19% to 21% on power purchases compared with current Eskom rates.

Price increases on these agreements will also be linked to the consumer price index, rather than the more unpredictable Eskom price hikes, says the city.

A total of R8-billion in power is expected to be procured between the two newly-inked agreements, which is required to be below Eskom rates over the full 20-year contract term.

CoCT Energy MMC Xanthea Limberg says the agreements will avoid nearly two-million tons of carbon emissions, earning the city carbon credits that can be traded on the open market to generate funds for further infrastructure investment.

Cape Town has already generated R36-million in carbon credits via municipal waste-to-energy initiatives that reduce gas emissions at landfill sites.

“With these initial power purchases, we are laying the foundations for a more sustainable and scalable generation programme,” says Limberg.

“This is all made possible by the diligent creation of an entirely new procurement framework for independent power to ensure robust, bankable, successful execution and long-term power delivery to the city.”