That year, desperate to find a solution, Cape Town announced plans to buy its own power from independent transforming power plants. The fallen cost and exponential growth in renewable energy technology made it possible. Amazon recently announced that it will do so building own solar farm to run its data centers in South Africa, thus separating itself from the losses of the national grid. If companies can do it, why can’t municipalities do it?
The answer is laid out in a complex web of regulations and prohibitions. The Ministry of Mineral Resources and Energy, in consultation with the National Energy Regulator of South Africa, has one power to judge where South African citizens get their energy, how it is sold, and what sources are used to make it happen. In practice, it would give Eskom, the state owner, a monopoly on energy production and supply.
Six years ago, Cape Town demanded that it be empowered by the ministry to purchase renewable energy from independent power producers. Producers first deliver electricity directly to Cape Town via the grid, and if they generate more electricity than Cape Town needs, any surplus will flow across the country.
The request ended with a court battle over constitutional questions about who will decide. Due to the strength of South Africa’s constitution supporting the rights of citizens, the case progresses to an even greater fight for the rights of citizens with credible power.
Cape Town did not win that case, but the debate it started created political pressure. In October 2020 the government announced the revision of electricity regulations to allow municipalities to find their own ways to generate electricity or buy them from independent producers.
However, the minister still has the final authority to register any new electricity agreements involving municipalities. Moreover, President Cyril Ramaphosa emphasized his commitment to a “centralized state-owned” model in that state in the union talks, in which he devised various ways to get his government more power for the country. The power struggle between South African cities and the national government this year is coming to a new, and more controversial phase.