KEY POINTS
- Cape Town issued a tender to procure 500MW of electricity from private energy traders through one- to ten-year agreements.
- The move aims to cut reliance on Eskom, lower electricity costs, and diversify the city’s energy mix.
- The plan allows participation in the wholesale electricity market, with power delivery expected within 36 months.
The City of Cape Town has issued a tender to procure 500 megawatts of electricity from energy traders through power purchase agreements ranging from one to ten years.
The initiative is aimed at diversifying the city’s energy mix and reducing dependence on Eskom amid rising electricity costs and ongoing load-shedding.
The tender allows electricity to be sourced from multiple generation technologies, including solar power. Interested bidders have until May 13 to submit proposals under the procurement programme.
The city currently spends about 70 percent of its tariff income purchasing bulk electricity from Eskom. Officials say the new procurement approach is designed to secure more affordable power from the open market while strengthening energy security for residents and businesses.
Energy MMC Xanthea Limberg said the tender represents another step in the city’s strategy to access clean and competitively priced electricity. She added that the move forms part of broader interventions under the city’s energy strategy to reduce costs and expand sustainable power access.
Limberg encouraged energy traders and aggregators licensed by the National Energy Regulator of South Africa to submit proposals, noting that the city aims to accelerate procurement from the open market.
Participation in wholesale electricity market
The tender also enables Cape Town to participate in the South African Wholesale Electricity Market, allowing bidders to procure electricity through the wholesale market.
Under the terms, first power delivery must occur within 36 months after signing the power purchase agreements. The city will not be involved in developing generation facilities, and bidders cannot source power from plants already under exclusive agreements with the municipality or part of existing procurement processes.
The procurement plan forms part of broader efforts to protect Cape Town from Eskom’s load-shedding schedules and increasing tariffs. Officials say sourcing power from multiple suppliers will enhance supply stability and reduce the financial burden of electricity purchases.
