The City of Cape Town plans to procure up to 500 MW of electricity from energy traders and aggregators, marking a shift away from the traditional single-buyer model dominated by Eskom.
The city said it will establish a panel of approved traders capable of supplying electricity through multiple power purchase agreements enabling it to source power at prices below Eskom’s bulk tariff while diversifying supply.
Mayoral Committee Member for Energy Alderman Xanthea Limberg said the programme intends to secure cost-competitive electricity and strengthen supply resilience.
“The tender also enables the city to participate in the South African Wholesale Electricity Market as bidders may procure energy from the market,” Limberg said.
The procurement framework allows for short and long-term contracts. Electricity will be sourced from generators connected to the national grid with traders aggregating supply from multiple projects and delivering it through existing transmission infrastructure.
The city said procuring power below Eskom tariffs could help mitigate rising electricity costs for municipal customers.
At the same time, the model introduces a new intermediary layer in the market. Traders are expected to play a central role in aggregating generation, managing price risk and balancing supply across multiple sources.
The city said the move is part of a broader shift in its electricity procurement strategy.
