The announcement that Cape Town is make 'green' electricity certificates available to power purchasers marks another milestone in the move toward renewable energy in South Africa.
The city on March 25 announced that businesses and individuals would be able to buy renewable energy generated by wind turbines situated on the R70 million Darling Wind Farm pilot project situated through the purchase of Green Energy Certificates (GECs).
Although the biggest to date, Cape Town's initiative is not the first. In 2007 the City of Tshwane made a similar purchase agreement with Amatola Green Power for three years. This 'green electricity' is generated from the burning of bagasse, a fibrous sugar cane matter, by Tongaat Hulett Sugar Limited. The City bought approximately 2MW (Megawatts) of green electricity which could be sold to consumers.
Cape Town's move, involving an initial stock of 10GWh (Gigawatt hours), or 10 000kWh (Kilowatt hours) for sale via GECs, is more ambitious.
The deal comes almost four years after the city entered into a Power Purchase Agreement with the Darling Wind Power Company, which outputs 5.2 MW of electricity production into the Eskom grid.
While the renewable energy being fed into the same grid that carries coal and nuclear-generated energy means participating consumers do not directly receive the energy created at the wind farm, the certificates allow them to support and indirectly participate in, the generation of renewable energy.
Although essentially only an electronic record, the GECs, will allow businesses and individuals to show off their commitment to sustainability.
"We believe that there are many companies who wish to demonstrate that they are conducting their business in an environmentally sustainable manner," said Alderman Clive Justus, Mayoral Committee Member for Utility Services.
However the renewable energy comes at a price 25c per unit (excluding VAT) higher than the standard electricity available on the grid, as income generated from the GEC sales are intended to cover the premium the City has to pay for the generation of green electricity. However, over the longer term, green electricity prices are considered more stable than that produced by Eskom, which is introducing increasing tariffs over the next three years.
Brian Jones, Head of Green Energy, Electricity Services in the City, notes, green electricity may be relatively more expensive than coal for the first five years after expansion, but once the capital expenditure was paid off, the price would drop in relative terms.
Jones stated that GECs will go on sale "once or twice a year depending on how much green electricity has been generated and how much Green Certificate Stock has been accumulated".