Cape Town plans to end load shedding – Here’s why you should plan to relocate your office
Businesses across the country have been buckling under the pressure of extreme load shedding, with the economy estimated to have lost over R4 billion a day when blackouts were at their worst. Cape Town’s plans to end load shedding all point to a potential national solution at a critical time for our economy.
With no end to Eskom’s woes in sight, the City of Cape Town has taken the initiative with plans to decouple itself from the national grid entirely – and that’s excellent news for businesses in the city and entrepreneurs thinking of relocating.
In this article we take a deeper dive into this initiative and outline some of the benefits for commercial property tenants and semigrants planning to call the Mother City home in the near future.
Cape Town ahead of the pack in sustainable energy
Since 2008, it has been apparent that Eskom is facing an ongoing struggle to provide electricity to households and businesses in South Africa. Cape Town has been building energy reserves in an effort to lessen the impact of higher load shedding stages and the recent spike has fuelled the city’s drive to end load shedding.
Cape Town mayor Geordin Hill-Lewis announced on the 25th July 2022 that the city has a plan to roll out a program that allows them to buy power from commercial and industrial producers.
Prior to this the city published a 10 point plan to break the city’s reliance on the national power grid. The city requested that the national government take the following steps to ensure the Cape Town’s energy independence.
- Abolish the 100 MW threshold for independent power producers and speed up the licensing period to no more than 14 days
- Introduce a tax write off for businesses and households that invest in electricity generation and battery storage capacity
- Create an exemption for financially stable municipalities to bypass the existing licensing and red tape associated with using IPP’s.
- Do away with the requirement that municipalities need explicit permission from the Energy Minister before proceeding with IPP projects.
- Offer guarantees from National Treasury to back municipalities financially as they secure funding for independent power production.
- Suspend the DTI’s local content requirements until such time as the power situation has stabilised.
- Exempt and simplify registration and NERSA licensing requirements.
- Remove the red tape red tape associated with natural gas imports to allow the Western Cape to make use of this energy efficient electricity production method.
- Convert Eskom’s Ankerlig plant in Atlantis, to natural gas.
- Create a power crisis unit in the National Treasury staffed by experts who can make quick and reliable decisions to help alleviate the country’s power shortage.
What an off-grid Cape Town means for business
Every load shedding event costs businesses precious revenue. This can take the form of financial losses caused by power surges and damaged equipment, and lost income when companies are forced to close their doors and can’t serve customers or clients.
The recent load shedding spike which saw the country hit level six – with 12 hours of blackouts a per day – is estimated to have cost the country more than R4,2 billion for each 24 hour period. According to a report by the Daily Maverick on calculations supplied by Alexander Forbes, the translation of this cost for the Western Cape alone is more than R500 million per-day.
If Cape Town succeeds in its mission to secure energy from independent power producers and say goodbye to the Eskom grid for good, it could be transformative for the local economy.
The benefits of relocating your business to an “off-grid” Cape Town would include:
- Reliable power supply with minimal downtime
- Less capital expenditure on solar power systems, back-up generators, and other devices
- Minimal disruptions to business due to load shedding, creating a stable and prosperous commercial environment where small, medium, and large enterprises can thrive
- The ability to serve international clients without the fear that load shedding will disrupt service delivery and communications for an extended period.
Cape Town’s plans to end load shedding means the city is poised to become South Africa’s first energy independent metro. A boom in business activity will make commercial properties in the Mother City sought after like never before.
As a prospective commercial property investor, business owner or Cape Town office tenant, now could be the perfect time to secure an office unit in the Cape peninsula.
To learn more about our selection of Cape Town commercial and industrial properties, contact the commercial space team today.