SUPPORTED by a service provider, the Dr Beyers Naude Local Municipality (DBNLM) in the Eastern Cape is applying current legal electricity trading mechanisms and small-scale embedded generation with local private partners to keep both municipalities and Eskom financially secure. The project is being hailed as a success and the first of more to be rolled out across the country.
The Ministry of Electricity and Energy said on Monday (2 December), Deputy Minister for Electricity & Energy, Samantha Graham-Maré, met with the leadership of DBNLM to discuss progress of the municipality’s innovative electricity programme. This programme has the goal of providing affordable electricity to residents while securing revenue so that the municipality can pay off its Eskom debt and keep up to date with monthly current Eskom payments. To date the municipality has been able to achieve all of these goals.
The programme, developed and implemented by the municipality’s appointed service provider, Utility Consulting Solutions, involves an innovative application of current legal electricity trading mechanisms and small-scale embedded generation together with local private partners. By working with local businesses, the municipality has been able to leverage the electricity generated from alternative supplies, without burdening the municipality’s balance sheet. These alternative supplies are currently from rooftop solar and battery storage and are able to provide dispatchable power during peak demand periods.
The Ministry says many municipalities are afraid of decreasing revenue from electricity sales as residents and businesses move to rooftop solar, usually in the face of massive tariff increases. This leaves both municipalities and Eskom worse off, as municipal debt to Eskom rises.
Through this programme, DBNLM will be able to keep any increases, even those approved by Nersa, to a maximum of annual CPI + 1%. The municipality will procure the same number of units from Eskom, while maintaining a healthy stream of income.
Graham-Maré said: “I congratulate the leadership of Beyers Naude Municipality for showing commitment to public-private partnerships that result in innovative solutions to municipal revenue enhancement and providing affordable electricity to residents. I will be driving similar innovative programmes in other willing municipalities across the country, so that we keep both municipalities and Eskom financially secure, and ensure quality service delivery to residents.
“This programme also shows how renewable energy can directly contribute to affordable and accessible energy for all South Africans, including the free basic supply to indigent residents. The vital work done by the National Electricity Crisis Committee has enabled the transformation of the electricity market to unlock trading and embedded generation that allows for innovative solutions to our key challenge of municipal financial sustainability,” she said.
The Mayor of DBNLM, Cllr Willem Safers, thanked the partners and service provider for collaborating on the partnership that has helped to turn around the municipality’s future. He said, “From July 2025 we will realise a 40% savings for residents on electricity tariffs, while still buying the same amount of electricity from Eskom, and balancing our books – it’s a win-win for everyone! We are the first municipality to pay our partners cash every month for the electricity that they generate, and will aim to bring 12,000 households into the programme as co-generators of electricity.”
Graham-Maré confirmed that the Ministry of Electricity and Energy will be working together with the South African National Energy Development Institute (Sanedi), Salga, Cogta, and National Treasury to develop a programme that can be rolled out in 2025 to other municipalities across all provinces.
