Cape Town powers up its own future with increased uptake from IPPs

24 November 2020
Cape Town is set to take advantage of the recent Department of Energy’s decision to allow major cities to purchase electricity directly from Independent Power Producers (IPPs). The decision is anticipated to be a major fillip for the renewable energy and IPP sector. “A lot of hard work still lies ahead to implement this policy, but it is a major step in securing a better energy future for the city,” comments Barto van der Merwe, Buildings Director at AECOM.
Document Downloads 
application/msword iconCape Town powers up its own future with increased uptake from IPPs_final58.5 KBDownload
PreviewCape Town is deploying rooftop solar plants to reduce the impact of load shedding996.5 KBDownload
PreviewPhotovoltaic installation near 16 on Bree in Cape Town959.83 KBDownload
PreviewRenewable energy at Airport Industria next to Cape Town International Airport951.36 KBDownload
PreviewIPPs will assist in reducing the strain on the national grid3.99 MBDownload
PreviewWind and solar power is already cheaper than Eskom-generated electricity3.94 MBDownload

Although Cape Town only plans to procure 300 MW of renewable energy in three to five years’ time, the implications of the announcement will immediately have a major positive impact on its economy. IPPs can also take encouragement from the city’s compiling of a mini Integrated Resource Plan (IRP) as recently announced, indicating that a longer-term plan for greater self-reliance is on the cards, notes van der Merwe.

Independent energy sources contribute to decreased load shedding and increased energy security. “This is an important consideration for AECOM’s international clients when it comes to investment decisions. As such, companies need to carefully weigh up their options,” notes Werner Schneeberger, Executive at AECOM. He points to the fact that Cape Town’s Steenbras pumped storage scheme, combined with rooftop solar plants, already play a significant role in reducing the severity of load shedding in the city.

“Areas supplied by the city in this fashion are likely to become business hubs. Another factor to take into consideration is that Eskom tariffs have tripled over the last decade, with future price uncertainty a potential deterrent to investment. Power purchased from IPPs automatically comes with price certainty, while wind and solar power is already cheaper than the cost of Eskom electricity,” elaborates Schneeberger.

“Cape Town will increasingly be able to shape the power curve by setting tariffs for both producers and users,” argues Brian Homann, Renewables Lead at AECOM. He highlights the example that power could be more expensive when production is low and usage is high, such as during the evening peak. It could be cheaper when production is high and usage is low, such as over a sunny weekend when factories are closed but solar power can still be generated. “Such a scenario is dependent on future pricing structure decisions. This will drive investment in smart grid control solutions and storage, and gas peaking plants, as well as allowing more renewables in the energy mix,” reveals Homan.

Businesses also need clean energy to meet their sustainability targets in terms of greenhouse gas (GHG) emissions, adds van der Merwe. “As Cape Town’s electricity grid becomes cleaner and increasingly powered by wind and solar energy, forward-looking businesses will want to be supplied by the city.” This is because transport is a major GHG contributor, with companies increasingly opting for electric vehicles (EVs). A cleaner grid will increase the uptake of EVs in Cape Town, leading to reduced emissions, a cleaner and healthier city and ultimately, a more attractive place for business, he points out.

“Furthermore, any reduction of energy demand on the national grid on the part of major cities theoretically has the potential for Eskom to focus on economic development or rekindling the country’s industrial capacity, thus stimulating much-needed growth. AECOM is pleased to see that Cape Town is taking a lead in actively implementing its energy and sustainability strategies. We welcome and support this positive development of greater self-sufficiency in terms of energy supply,” concludes van der Merwe.


Notes to the editor

To download hi-res images for this release, please visit and click on the AECOM link to view the company’s press office.


AECOM is the world’s premier infrastructure consulting firm, delivering professional services throughout the project lifecycle – from planning, design and engineering to program and construction management. On projects spanning transportation, buildings, water, energy and the environment, our public- and private-sector clients trust us to solve their most complex challenges. Our teams are driven by a common purpose to deliver a better world through our unrivalled technical expertise and innovation, a culture of equity, diversity and inclusion, and a commitment to environmental, social and governance priorities. AECOM is a Fortune 500 firm and its Professional Services business had revenue of $13.2 billion in fiscal year 2020. See how we deliver what others can only imagine at and @AECOM.

Media Contact
Renay Tandy
NGAGE Public Relations
Phone: (011) 867-7763
Fax: 086 512 3352
Cell: 082 562 5088
Email: renay [at] ngage [dot] co [dot] za

Browse the NGAGE Media Zone for more client press releases and photographs at