Cape Town secures first solar power deals at below Eskom rates

Cape Town has concluded its first power purchase agreements (PPAs) to buy electricity from independent producers at rates lower than Eskom. The city is the first in South Africa to reduce its reliance on the national utility by purchasing power on the open market.

The initial agreements total 70MW through 20-year contracts with solar plants located in Atlantis, provided by JEMPEC (30MW), and Philippi, provided by Make A Difference LLC (40MW). These agreements are expected to save the city between 19% and 21% compared to current Eskom rates, with future price increases tied to the Consumer Price Index (CPI) rather than Eskom’s pricing.

The city plans to procure up to 200MW through a competitive tendering process in the coming months, with long-term goals to acquire up to 700MW of independent power. Beyond cost savings, the agreements are expected to avoid nearly two million tonnes of carbon emissions, allowing the city to earn and trade carbon credits to fund infrastructure investments.