Andrew Stegmann

Cape Town Moves to Set Up Own Electricity Supply

Cape Town wants to set up its own independent power producer office to secure renewable energy, following President Cyril Ramaphosa’s announcement during his Sona address that municipalities in good financial standing will be allowed to procure their own power from IPPs. However, the City says the turnaround could be 2-3 years.

Executive director for energy at the City of Cape Town, Kadri Nassiep says the City has engaged national treasury with a view to setting up its own independent power producer (IPP) office along the lines of the renewable energy independent power producer programme (REIPPP).

He says “we have also engaged CSIR to prepare our mini-IRP that will direct our call for proposals”. Electricity provision in the country is guided by the integrated resource plan (IRP) which sets out what electricity will be sourced and when. Government has used the IPP office, which falls under the department of mineral resources and energy, to procure renewable energy in earlier REIPPs. The IPP office has begun an exercise to source 2,000 to 3,000 megawatts of emergency supply on an urgent basis.

Cape Town’s intention to set up its own IPP office, which will implement its own IRP, would constitute a dramatic re-shaping of the energy landscape. Nassiep says “we still have to refine tariffs, but we are looking at it already”. Budgets need to be realigned, he says, but that’s not a huge issue. “So we are cautiously optimistic, but let’s see what [mineral resources and energy minister] Gwede Mantashe publishes in terms of schedule 2.”

Mantashe announced earlier in February at the Mining Indaba in Cape Town that the government would be gazetting a revised schedule 2 of the Electricity Regulation Act, which will enable self-generation and facilitate “distributed generation” by municipalities.

The City of Cape Town has fought a protracted battle with the minister and regulator Nersa over the right to source its own electricity. The dispute has its origins in 2015 when then Cape Town mayor (Patricia de Lille) asked the then energy minister (Tina Joemat-Pettersson) to allow the City to source renewable energy, but did not even get a reply. The case has been set down to be heard in the high court on 11-12 May. Given the constrained electricity supply, the City of Cape Town had argued for an earlier court date, but has not been able to secure this.

Asked if the court case will still go ahead, Nassiep said: “In my opinion yes. We still need clarification from the court regarding our rights. “For instance, the minister might opt to issue [a] once-off determination in favour of munis and then not again. Or he can opt to keep it later to a cap of 500 megawatts, which might limit us unfairly. So it’s still needed.”

Nassiep says that “unfortunately” there is a likely two- to three-year time horizon for Cape Town’s own sourced power to come on stream because of financial closure issues, environmental impact assessments, power purchase agreements as well as connection charges and ordering of connection and plant equipment. The Centre for Environmental Rights (CER) has joined the Cape Town court action, the CER’s Nicole Loser saying that local government has a constitutional duty to provide clean and healthy electricity, “which does not pollute our air, water, soil, or damage our climate”.

Loser says the Sona remarks were “very vague” on the details of municipal procurement. “Also not clear is if there will be the needed legal reform to address the current uncertainty around municipal procurement of whether Mantashe will simply issue the determination requested by the City.”

Cape Town mayor Dan Plato cautiously welcomed Ramaphosa’s announcement. “However, urgent clarity is required from the national government on the legal and regulatory nuts and bolts of how this must happen. “We need urgent clarity from the government on the roles and responsibilities for municipalities and other stakeholders in terms of the new generation capacity regulations in the Electricity Regulation Act,” said Plato.

He says the City is doing a study to determine how best to overcome energy poverty, through various projects including installing solar kits, solar home systems, increasing free basic electricity and improving access to gas. “Improving access to affordable electricity is a key deliverable that we are investigating at the moment.”

Ramaphosa also announced that “a Section 34 ministerial determination will be issued shortly to give effect to the IRP 2019, enabling the development of additional grid capacity from renewable energy, natural gas, hydropower, battery storage and coal”. “We will initiate the procurement of emergency power from projects that can deliver electricity into the grid within three to 12 months from approval,” he said.

Nersa will continue to register small-scale distributed generation for own use of under one megawatt, for which no licence is required and will ensure that all applications by commercial and industrial users to produce electricity for their own use above one megawatt are processed within the prescribed 120 days, Ramaphosa said. “It should be noted that there is now no limit to installed capacity above one megawatt.”

He said that a bid window for round five of the renewable energy IPP will be opened and that the government will work with producers to accelerate the completion of bid window four projects. “We will negotiate supplementary power purchase agreements to acquire additional capacity from existing wind and solar plants.”

While the electricity generation shortfall the country faces was quantified at the release of the IRP in October at 2,000 megawatts, this has subsequently been revised in later official pronouncements to 3,000 and then 5,000 megawatts. A document issued after the January lekgotla of the ANC’s national executive committee put the shortfall at 5,000 to 7,000 megawatts.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: Matthew Henry [1], Arqm Ahmd [2].

Andrew Stegmann

Key Points From the 2020 South African State of the Nation Address

President Cyril Ramaphosa has admitted that the country is facing serious challenges but said action was being taken to address them. The President delivered South Africa’s 2020 State of the Nation Address in Parliament, in Cape Town, last night.

Load shedding and Eskom

“The load shedding over the last few months has had a debilitating effect on our economy and our people. At its core, load shedding is the inevitable consequence of Eskom’s inability over many years – due to debt, lack of capacity and state capture – to service its power plants.”

Ramaphosa said that in order for Eskom to undertake the fundamental maintenance necessary to improve the reliability of supply, load shedding will remain a possibility for the immediate future. He said as Eskom works to restore its operational capabilities, government will be implementing measures that will fundamentally change the trajectory of energy generation in our country. These measures include to rapidly and significantly increase generation capacity outside of Eskom.

“We will put in place measures to enable municipalities in good financial standing to procure their own power from independent power producers,” Ramaphosa said. Municipalities such as the City of Cape Town, business leaders and, lately, the ANC, have backed a plan to allow municipalities to be less reliant on Eskom.

“Over the next few months, as Eskom works to restore its operational capabilities, we will be implementing measures that will fundamentally change the trajectory of energy generation in our country,” Ramaphosa said.

As part of Ramaphosa’s planned steps for the state to become less reliant on the troubled power utility, the president said that the Integrated Resource Plan of 2019 with be given effect to allow for the development of additional grid capacity from renewable energy, natural gas, hydro power, battery storage and coal.

“We will initiate the procurement of emergency power from projects that can deliver electricity into the grid within three to 12 months of approval,” Ramaphosa said. He said they will allow more independent power producers to supply energy to the grid.

Land Reform

The expropriation of land without compensation also remained key, said Ramaphosa, adding measures would be taken to implement the decision after Parliament has concluded all the issues. Ramaphosa emphasized that land expropriation would be done with caution as agriculture is one of the industries with the greatest potential for growth.

“Government stands ready – following the completion of the parliamentary process to amend section 25 of the constitution – to table an expropriation bill that outlines the circumstances under which expropriation of land without compensation would be possible. To date, we have released 44 000 hectares of state land for the settlement of land restitution claims, and will this year release around 700 000 hectares of state land for agricultural production,” Ramaphosa said.

The president also announced that this year his government would implement key recommendations of the presidential advisory panel on land reform and agriculture to accelerate land redistribution, expand agricultural production and transform the industry.

“We are prioritizing youth, women, people with disabilities and those who have been farming on communal land and are ready to expand their operations for training and allocation of land. A new beneficiary selection policy includes compulsory training for potential beneficiaries before land can be allocated to them,” he said.

State-owned Enterprises

Ramaphosa said serious action will have to be taken to deal with SOEs who are drowning in debt with the National Treasury providing guarantees of more than R570 billion.
“This year, we are moving from the stabilization of state-owned enterprises to re-purposing these strategic companies to support growth and development.

“After years of state capture, corruption and mismanagement, we are working to ensure that all SOEs are able to fulfill their developmental mandate and be financially sustainable,” the president said. “In consultation with the Presidential SOE Council, we will undertake a process of rationalization of our state-owned enterprises and ensure that they serve strategic economic or developmental purposes.

The extent of capture, corruption and mismanagement in SOEs is best demonstrated at South Africans Airways, which was placed in business rescue late last year. The business rescue practitioners are expected to unveil their plans for restructuring the airline in the next few weeks.”

The train system

Ramaphosa also committed to turning around the Passenger Rail Agency of South Africa to fix the commuter rail network and said a plan for restructuring South African Airways would be unveiled in the next few weeks, and said government’s successes included pushing back against corruption.

Gender-Based Violence

Ramaphosa said they will increase their fight against gender-based violence. “We will amend the Domestic Violence Act to better protect victims in violent domestic relationships and the Sexual Offences Act to broaden the categories of sex offenders whose names must be included in the National Register for Sex Offenders and we will pass a law to tighten bail and sentencing conditioning cases that involve gender-based violence,” said Ramaphosa.

The youth

One per cent of South Africa’s budget would be set aside to assist with youth employment, Ramaphosa said during his State of the Nation Address .
“This will be through top slicing from the budget, which will require that we all tighten our belts and redirect resources to address the national crisis of youth unemployment,” he said. The initiative would be prioritized when Finance Minister Tito Mboweni delivered his medium-term budget policy statement later in the year.

Ramaphosa said the initiative was one of six “priority actions” spanning five years to reduce youth unemployment. The initiative would start immediately he said, under the banner of the Presidential Youth Employment Intervention. Ramaphosa said the six actions would ensure that the capabilities of every young South African was “harnessed”, enabling them to contribute to the growth of the country.

“We are building cutting-edge solutions to reach young people where they are – online, on the phone and in person. This will allow them to receive active support, information and work readiness training to increase their employability and match themselves to opportunities.”

He said that starting this month, government was launching five prototype sites in five province “that will grow to a national network reaching three million young people through multiple channels”. The network would allow young people to receive active support, information and work readiness training to increase their employability and match themselves to opportunities.

“We are fundamentally changing how we prepare young people for the future of work, providing shorter, more flexible courses in specific skills that employers in fast-growing sectors need. We are developing new and innovative ways to support youth entrepreneurship and self-employment,” Ramaphosa said.

“We are scaling up the youth employment service and working with TVET colleges and the private sector to ensure that more learners receive practical experience in the workplace to complete their training. We are establishing the first cohort of a presidential youth service program that will unlock the agency of young people and provide opportunities for them to earn an income while contributing to nation building.”

As part of the intervention, he said, the National Youth Development Agency and the department of small business development would provide grant funding and business support to 1 000 young entrepreneurs in the next 100 days, “starting today”.

Crime

He said that while police statistics showed that violent crime, rapes and murders have not gone down, improved detective methods would be effected through the training of officers. Ramaphosa said: ” Anti-Gang Units will be further strengthened, with priority given to the Western Cape, Eastern Cape, Gauteng and Free State.

“Following the graduation of 5 000 police trainees last year, 7 000 new police trainees have been enlisted this year to strengthen local policing. To improve the quality of general and specialized SAPS investigations, we are establishing a Crime Detection University in Hammanskraal,” the president said.

Cannabis

Ramaphosa also told the nation about his plans for hemp and cannabis. “This year we will open up and regulate the commercial use of hemp products, providing opportunities for small-scale farmers; and formulate a policy on the use of cannabis products for medicinal purposes, to build [the] industry in line with global trends”, Ramaphosa said.

Our take-aways

A number of Relocation Africa team members were able to attend a British Chamber round-table, to discuss SONA 2020. Key opinions and take-aways from those in attendance (not our own stances on the issues) were as follows:

  • There appears to be a faction within the ANC pushing back against the President, and this creates hurdles for his agenda for South Africa. However, a full-scale rebellion against him is highly unlikely.
  • An independent panel may be considered to remove the Public Protector.
  • There are still limitations in existence against independent power producers (IPPs) putting electricity back into the national grid, to take pressure off Eskom.
  • The budget speech may need to announce a cut in public sector wages in order to avoid a status downgrade by Moodies.
  • It was disappointing to see many promises not having deadlines attached to them in the SONA proceedings.
  • Overall, the President’s speech reassured many South Africans, who are hoping to see if the economy can develop sufficiently in 2020.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

Andrew Stegmann

Today Marks The 30 Year Anniversary of Nelson Mandela’s Release

February 11 marks the 30th anniversary of the release of former president Nelson Mandela who was jailed for 27 years following his arrest in 1962. South Africa will mark the anniversary with a string of events commemorating the historic moment when Mandela walked out of Victor Verster prison in the Western Cape.

The Nelson Mandela Foundation will host three events in the province that will highlight the “new prisons of Africa”. On its website, the foundation said the “prisons” ranged from physical prisons that were the site of high levels of incarceration and the failures of restorative justice to the effective prisons that defined people’s lives.

From 08:00 to 10:00, the foundation is expected to host a reunion of the original members who were in the reception committee that facilitated Madiba’s homecoming from Victor Verster, now called Drakenstein Correctional Services. President Cyril Ramaphosa is also expected give an address from Cape Town City Hall’s balcony, where Mandela gave his first speech after his release from prison, between 14:30 and 16:30.

In his Monday morning newsletter, Ramaphosa commemorated the release of the former president and ANC leader. He said while the country’s democracy was “well-entrenched” with robust and durable institutions and the lives of people had improved over the past 25 years since the first democratic elections, more needed to be done.

“Yet, there is so much further we need to travel. Inequality, especially as defined by race and gender, remains among the highest in the world. “Unemployment is deepening and poverty is widespread. Violence, including the violence that men perpetrate against women, continues to ravage our communities. In confronting these challenges, it is vital that we remain united,” Ramaphosa said.

Archbishop Emeritus Desmond Tutu and his wife Leah, who will be commemorating the anniversary on Tuesday, also paid tribute to Madiba, saying while circumstances and priorities changed over time, good values were timeless. “Thirty years ago, Nelson Mandela emerged from prison to dazzle South Africa and the world with his warmth and human values… We miss him,” the Tutus said.

Also commemorating the historic release will be the head of the Mvezo Traditional Council and Mandela’s grandson, Nkosi Zwelivelile Mandela, who called on South Africans to remember the leader as well as the vision his grandfather had had for the nation.

“We can make South Africa great again. We can fight the scourge of poverty and corruption. We can overcome all obstacles and achieve the vision of a united, free, non-racial, non-sexist and just South Africa in which all can enjoy prosperity and a better life for all,” he said.

Road Closures

Darling Street and surrounds will have traffic restrictions in place until 10pm on Tuesday, February 11 2020. Darling Street will be closed to traffic between Lower Plein and Buitenkant streets until the conclusion of Tuesday’s events. No parking will be permitted in Corporation and Parade streets. “The city appeals to motorists to seek alternative routes where possible as the restrictions/closures will likely result in some traffic congestion. Staff will be on duty in the area to redirect traffic,” Cape Town traffic service spokesperson Maxine Bezuidenhout said.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

Andrew Stegmann

Cape Town Back-yarders Urged to Register on Housing Database

An increase in urbanization is the leading factor in Cape Town’s housing crisis.

With only one in three registered on the city of Cape Town’s housing database, the city has encouraged more people in this sector to register.

The city said in a statement recently that almost 70% of informal back-yarders in the metro would not be eligible for a housing opportunity because they were not registered for subsidized housing.

The city says increased urbanization across South Africa over the past decade has resulted in a steady growth of backyard dwellings on publicly- and privately-owned land.

“The great need for affordable housing and services in and near urban centers especially means that we must ensure that we work in a planned, systematic and fair manner.

“It is really important for backyard dwellers to apply to register on the housing database. Back-yarders who are not registered on the database cannot be considered for housing opportunities created for them by the city and Western Cape Government. “

The city said that all qualifying beneficiaries and especially backyard dwellers should ensure that they were registered and that their details were correct and up to date.

“We also continue to focus on enhanced service delivery especially to back-yarders residing on council-owned properties. Cape Town was the first city in South Africa to introduce basic services to back-yarders residing on Council-owned properties.

“The back-yarder program started in 2014 and entails the provision of one-to-one water, refuse and electricity services to back-yarders residing on Council-owned property, such as rental units.

“The Municipal Finance Management Act determines that public money may not be used for enhancing private properties. Therefore, much work still needs to be done to see how back-yarder services will be rolled out to those residing on private properties within the framework of the law.

How to register on the housing database

The city said that urbanization was a challenge that all tiers of government, as well as the private sector and civil society organisations should deal with.

We “must work together and ensure that we are ahead of the curve with our plans to address rapid urbanization. We must bring our communities on board with the alternatives on offer”, the city’s member of the mayoral committee for human settlements, councilor Malusi Booi, said.

He also explained that the service was free and that there was no payment for registration.

Applicants can register on the housing database online, at city housing offices, MyEstate mobile offices that comes to various areas and at the Parow or Wale Street walk-in centers.

Applicants need a certified copy of their IDs and their spouses’ IDs, a completed housing assistance form, copies of their children’s birth certificates, marriage or divorce certificates, details of special needs where applicable, as well as supporting documents such as medical records and proof of address (FICA).

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].