Facing a drought that shows all too clearly the consequences of climate change, Cape Town has pledged to divest from fossil fuels. Its mayor is now suing for the right to buy renewable energy. Could this set the precedent for South African municipalities to move towards a cleaner, greener energy economy, asks Leonie Joubert?
In July this year, the mayor of Cape Town announced that the city planned to withdraw any investments that it might have in fossil fuel industries, and move them into greener fund options. This was after several months of lobbying by Fossil Free SA, the civil society organisation that is calling for companies and governments around the world to move their investment funds away from anything that supports fossil fuel industries.
This makes Cape Town one of the only—if not the only—cities on the continent to commit to moving its investments away from dirty energy, with the intention of putting its money behind greener and cleaner investments.
In explaining the move, Cape Town Mayor Patricia de Lille said this was part of a broader move to pull its funds away from supporting the ‘development of dirty and unsustainable projects’, and that it would manage taxpayers’ money in line with the city’s ‘principles of resilience and sustainability’.
The reality is that any benefits of mitigation measures like this, which reduce the release of more carbon dioxide into the atmosphere, will only be reaped by people living in the city in four or five decades from now, given the lag in the climate system. It will not save today’s citizens from the harsh impacts of climate change they’re experiencing right now. South Africans are reeling after a season of unnerving extreme weather events: devastating wildfires that hit the southern coastal town of Knysna earlier this year; extreme storms in Gauteng and flooding in Durban this month; three years of crippling drought in Cape Town, with taps literally expected to run dry in March 2018.
City takes on State
Cape Town has also been trying to change the way it shops for electricity, and is a test case for the difficult policy landscape governing electricity purchasing here at the moment. At present, the city buys its power directly from the state utility, Eskom, which mostly supplies the national grid with coal-based energy delivered from centralised power stations close to the economic highlands of the country: Gauteng and Mpumalanga. This energy is dirty, as it’s derived from coal, and inefficient because of electricity losses across the extensive grid.
But the city wants to buy some of its electricity directly from renewable energy plants – mostly wind farms – that operate on the edge of the city, in a bid to reach its goal of getting 20% of its electricity from renewables by 2020. To do so, the city needs permission from the national Ministry of Energy, and the National Energy Regulator. Apparently the city has been asking permission for three years now, with no success.
Mayor de Lille’s response to delays by the national ministry is to take the issue to the regional High Court, to force the minister’s hand. De Lille told a local broadcaster that her argument will be this: the current laws, which limit cities to buying their electricity from the national utility, are unconstitutional because they prevent the city from reaching its sustainability mandate to its citizens.
The issue is inherently political: the Cape Town municipality, and the Western Cape province in which the city is situated, are both run by the Democratic Alliance (DA), which is the official opposition party to the current ruling party, the African National Party (ANC). Any efforts to tackle a national ministry on service delivery and sustainability issues like this are likely to be interpreted as being about scoring political points.
Either way, if the High Court rules in Cape Town’s favour, it could be a game changer in South Africa, freeing up municipalities around the country to go shopping for electricity directly from private solar or wind farms, rather than being locked into buying from the state’s supplier, Eskom.
The municipality’s divestment announcement looks as though it might be in step with the city’s wider energy sustainability objectives. But the question is about whether this particular move is more than just a public relations stunt. It’s hard to say.
The announcement to disinvest from fossil fuels was buried in the bottom of a press release, released in July, with no details about the practicalities of how the divestment would happen. The mayor’s office did not respond to several attempts to get more information on how it intends to withdraw those investments, where it will move them to, over what period, or what level of accountability there will be in the process.
If it’s votes that the DA wants to win at the next election, anything that keeps electricity cheap is likely to score the most points.
Eskom recently announced that it planned to hike the price of bulk electricity sold to municipalities by 27% by mid-year in 2018. Should the court free up the regulatory landscape to allow cities to buy electricity directly from local wind farms, it would play directly into the DA’s hand: the price of green electricity is getting cheaper by the day, relative to the coal-based state-run suppliers.