News agency, Cape Town, South Africa
Friday December 15th 2017

Cape Town to sell ‘green’ electricity to consumers

Bianca Silva

The announcement that Cape Town is make ‘green’ electricity certificates available to power purchasers marks another milestone in the move toward renewable energy in South Africa.

The city on Wednesday (March 25) yesterday (subs: Wednesday) announced that businesses and individuals would be able to by renewable energy generated by wind turbines situated on the R70 million Darling Wind Farm pilot project situated through the purchase of Green Energy Certificates (GECs).

Although the biggest to date, Cape Town’s initiative is not the first. In 2007 the City of Tshwane made a similar purchase agreement with Amatola Green Power for three years. This ‘green electricity’ is generated from the burning of bagasse, a fibrous sugar cane matter, by Tongaat Hulett Sugar Limited. The City bought approximately 2MW (Megawatts) of green electricity which could be sold to consumers.

Cape Town’s move, involving an initial stock of 10GWh (Gigawatt hours), or 10 000kWh (Kilowatt hours) for sale via GECs, is more ambitious.

The deal comes almost four years after the city entered into a Power Purchase Agreement with the Darling Wind Power Company, which outputs 5.2 MW of electricity production into the Eskom grid.
While the renewable energy being fed into the same grid that carries coal and nuclear-generated energy means participating consumers do not directly receive the energy created at the wind farm, the certificates allow them to support and indirectly participate in, the generation of renewable energy.

Although essentially only an electronic record, the GECs, will allow businesses and individuals to show off their commitment to sustainability.
“We believe that there are many companies who wish to demonstrate that they are conducting their business in an environmentally sustainable manner,” said Alderman Clive Justus, Mayoral Committee Member for Utility Services.

However the renewable energy comes at a price 25c per unit (excluding VAT) higher than the standard electricity available on the grid, as income generated from the GEC sales are intended to cover the premium the City has to pay for the generation of green electricity.  However, over the longer term, green electricity prices are considered more stable than that produced by Eskom, which is introducing increasing tariffs over the next three years.

Brian Jones, Head of Green Energy, Electricity Services in the City, notes, green electricity may be relatively more expensive than coal for the first five years after expansion, but once the capital expenditure was paid off, the price would drop in relative terms.
Jones stated that GECs will go on sale “once or twice a year depending on how much green electricity has been generated and how much Green Certificate Stock has been accumulated”.

Tags: Amatola Green Power, Darling Wind Farm, Darling Wind Power Company, Green Energy Certificates, renewable energy

Reader Feedback

One Response to “Cape Town to sell ‘green’ electricity to consumers”

  1. Marisa Naude says:

    As an employee of a renewable energy certificate trading company (GreenX Energy) I remain baffled as to how the city is legally permitted to trade RECs without going through the independent issuing body (see http://www.zaRECs.co.za). This way no independent body audits that the certificates are correctly numbered and only sold once. The emissions reductions claimed are not valid if the generator (Darling) and the trader (the city) make an off the record deal among themselves. Who is monitoring it? The Department of Energy has set up recommendations for the Independent Issuing Body (IB) at great expense.The domain protocol and business plan were finalised just this year at the expense of approximately 2 million rand. What gives the city the right to unilaterally bypass this mechanism with impunity? The rest of us pay good money to be registered on the database. I would greatly appreciate it if Bianca Silva published the comments of our director Glynn Morris who is away at present. He can be contacted on 021 701 3364 or glynn.morris@greenxenergy.com

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