The City of Cape Town has concluded its first power purchase agreements with independent producers, buying electricity at rates cheaper than Eskom, Mayor Geordin Hill-Lewis announced on Monday 31 August.

The City signed 20-year agreements worth 70 MW with two solar plants as part of a competitive tender for up to 200 MW. JEMPEC will supply 30 MW from a plant connected to the City’s grid in Atlantis, and Make A Difference LLC will supply 40 MW from Philippi.

Cape Town is the first South African metro to reduce Eskom reliance by buying power on the open market.
”Families cannot be expected to absorb endless Eskom price increases forever,” said Hill-Lewis, “and that’s why we are working to end reliance on expensive Eskom power to make electricity more affordable for Capetonians.” He said the City planned to buy up to 700 MW of independent power over time.

Savings linked to CPI

The agreements are 19 to 21% cheaper than current Eskom rates, with price increases linked to the Consumer Price Index (CPI) over the 20-year term rather than Eskom tariffs. A total of R8bn in power is expected to be procured across the two agreements, all at below-Eskom rates.

Carbon credits and emissions cuts

Mayco member for Energy Xanthea Limberg said the agreements would avoid nearly two million tonnes of carbon emissions and earn the City carbon credits, which could be traded to generate funds for infrastructure investment. The City has already generated R36m in carbon credits through waste-to-energy initiatives at landfill sites.

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

Other energy milestones

Among other energy milestones, residents and businesses have earned R67 million from selling 150 gigawatt hours of excess solar power back to the City since June 2024, and over 1 700 MW hours of power have been traded through the grid since 2024.

The City has also completed its first own-built solar and battery storage plant in Atlantis, totalling 7 MW of photovoltaic capacity plus 10 MW of battery storage, and mitigated 24% of load shedding during the Eskom generation crisis.

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