CITY POWER - Joburg unveils R400m plan to beat load-shedding but will need funding

Joburg unveils R400m plan to beat load-shedding but will need funding

Political CorrespondentThe cash-strapped City of Johannesburg — which has not been spared the devastating effects of continued and deepening power cuts — has unveiled a yet-to-be-funded multimillion-rand plan that could avert up to stage 3 load-shedding in the short- to medium-term.

Executive mayor Mpho Phalatse said on Thursday the multiparty government and the metro’s City Power utility have a plan to mitigate and ultimately end the rolling blackouts in SA’s economic hub.

The energy crisis has resulted in factories and small, medium and micro enterprises — which are crucial to job creation — closing shop due to unreliable power supply. Load-shedding means consumers and businesses have to go without electricity for up to 10 hours a day, costing the struggling economy billions of rand per day.

In a media briefing attended by City Power CEO Tshifularo Mashava and environment & infrastructure services member of the mayoral committee (MMC) Michael Sun, Phalatse said City Power has costed a R401m budget for a plan, including a recommissioning of the two existing Open Cycle Gas Turbine Stations for R20m.

"This would of course require the city to procure and burn diesel. We are already sitting with 1.2-million litres of diesel for these sites. This would add 74MW to the network, when needed," the mayor said.

"At R85m for a Ripple Relay System, City Power will be able to remotely regulate high-energy use products such as geysers, swimming pool motors and the like. This would save 80MW, when needed.

"At R175m we will procure and distribute smart meters and communication that will enable City Power to be able to limit the amount of power distributed to homes, so instead of completely turning the power off, we will be able to supply homes with enough energy to power essential needs.

"This will save an additional 322MW, when needed. This will not be done on a whim but will be communicated to customers. The communication system will require R28m.

"This requires an energy management system upgrade, costing R120m [for] City Power to better monitor, control, and optimise the performance of its transmission system."

However, Phalatse said the metro, which has a budget of R77.3bn for the 2022/2023 financial year, is not "sitting with R400m that can be easily shifted towards this programme".

"We are therefore exploring the establishment of an infrastructure fund, and we will be approaching development finance institutions, the private sector, the provincial and national governments to fund this project, where we will be leveraging our status as the economic hub of the country and the good governance practices of the multiparty government," Phalatse said.

City Power has expressed the view, she said, that if the utility were to get the money today, "it would take up to six months to get this mitigation plan active given that much of the infrastructure is already in place".

"We are not sitting on our hands or burying our heads in the sand, as we fully comprehend the scale of this emergency and the urgency required to address it," the mayor said.

"We want our residents to proudly call Joburg home. We want our visitors to come back again. We want those doing business in the City to keep their doors open, grow and employ more people."

In May 2022, City Power was allocated an operational budget of R20.5bn, of which R1.6bn is earmarked for a reduction of power outages. City Power was also allocated capital expenditure of R1.2bn to fund infrastructure upgrades and refurbishments.

Phalatse said for the period between July 1 2021 to November 1 2022, the power distribution utility experienced 122 days of load-shedding, with "2,175 incidents of theft and vandalism". In 2022, City Power spent R200m on 390 mini-substations due to theft and vandalism, "which generally happens during load-shedding".

The metro is losing, on average, two mini-substations a day.

"This is not the work of amateur criminals, but it is criminality committed by highly armed and resourced syndicates. Therefore, my office is again writing to the Gauteng police commissioner Lt-Gen Elias Mawela to dedicate resources to this attack on Johannesburg," Phalatse said.

"When we talk about a loss of revenue and an increase in spending, for the period under review from July 1 2021 to June 30 2022, City Power experienced losses of 386GWh, resulting in a net revenue loss of approximately R284m.

"Furthermore, City Power incurred costs amounting to R155m on overtime costs as a result of load-shedding, and R35m in insurance costs for the period under review. This translates to a total loss of R474m for the period under review," Phalatse said.

"We are also losing customers and revenue due to customers going semi or completely off-grid by investing in alternative sources of energy such as standby and distributed generation, rooftop solar systems, and battery energy storage systems, among others."

mkentanel@businesslive.co.za

New structures: City of Johannesburg mayor Mpho Phalatse says the city government is exploring the establishment of an infrastructure fund.Thulanoi Mbele