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The City of Johannesburg Executive Mayor, Councillor Mpho Moerane on Friday, 08 October 2021, signed a new Power Purchase Agreement with the privately-owned Kelvin Power Station to increase electricity supply capacity in the metropolitan.

The Mayor signed the Power Purchase Agreement alongside Gauteng Premier David Makhura and the Environment and Infrastructure Services Department MMC, Cllr Tania Oldjohn, at the City Power headquarters in Booysens.

The new improved agreement is expected to boost power supply reliability in Johannesburg communities and reduce load shedding. 

Speaking shortly after the signing of the new agreement, Moerane indicated that the agreement includes revised terms and conditions that also allow for the greater operating risk of Kelvin to be transferred to the operator of the power plant, as they are better placed to manage variable input costs.

 “The agreement we signed today answers the questions that have been in the minds of many since we started speaking about plans to take over the supply of electricity by Eskom in Johannesburg communities”, Mayor Moerane said.

This new agreement comes at a time when Eskom is constrained from providing additional capacity, which deems extending the current Kelvin agreement necessary for a further two years.

 Mayor Moerane said: “The challenges of prolonged electricity outrages in Eskom serviced areas that include Soweto, Ivory Park, Orange Farm, Finetown, as well as Diepsloot and Sandton, made it urgent for the City to enter into the new agreement on Kelvin.”

The signed agreement will assist the City to move from the position where power outages are normalised in some Johannesburg communities, especially where the majority are living below the breadline.

“The City, through City Power, had entered into a 20-year Power Purchase Agreement with the Kelvin Power Station owners, Aldwych Consortium. This agreement was due to expire in a month’s time.

The expiry of the old agreement has made it necessary for the two partners to enter into a new agreement to ensure continuity of reliable power supply in the City,” said Mayor Moerane.

The new agreement will ensure that the City receives 100 Megawatts more - making the total output from the power station 180 Megawatts. Previously the City had received 80 Megawatts from Kelvin.  

The Mayor added: “The City has thus entered into the new agreement for one sole reason, which is to ensure that there is a reliable electricity supply to the people of north-eastern suburbs of Johannesburg. These are Greenstone, Kew, Lombardy, Alexandra, Melrose, Rosebank and Houghton.” 

“Johannesburg remains committed to assisting Eskom in resolving electricity supply challenges in all affected communities across the City. Today’s Kelvin Power Station agreement is a clear demonstration of the commitment by the City’s current leadership to better serve the people of Johannesburg,” the Mayor said.

Gauteng Premier David Makhura described the signing of the Kelvin agreement as a significant milestone that will see an additional 12% electricity supplied in Johannesburg.

"I am happy that Johannesburg has taken a concrete step to ensure a reliable supply of electricity to the people of Johannesburg. The City has always understood their role in Gauteng and in the country. I spoke to the late Mayor Matongo and said you have two things to sought out in the City, electricity and the roads, as they have a significant impact on the economy,” the Premier said.

Premier Makhura added: "We have lost two mayors whom I had discussions with about the power issue in Johannesburg, and I now expect you Mayor Moerane to continue to fix power problems in the city." 

"I don't want a Mayor who just talks with no results. Mayor Moerane, I endorse your plan and I am proud of you. This is the best way to guarantee reliable supply of electricity throughout Johannesburg," he said.

The Premier further took the opportunity to call on Rand Water “to also step up to resolve the issue of water supply throughout the Gauteng”. 

The signing of the new agreement also comes just a day after Eskom and the City of Johannesburg, through City Power, have reached an agreement that launches the beginning of the take-over of the Soweto electricity supply. 

Issued by City of Johannesburg