- The City of Cape Town launches a first-of-its-kind energy trader tender targeting 500 MW of power.
- Power Purchase Agreements will run from one to 10 years with solar, wind, gas, and other renewable sources eligible.
- The initiative aims to reduce reliance on Eskom, lower electricity costs, and secure sustainable energy for residents and businesses.
Cape Town is set to become the first municipality in South Africa to procure electricity at scale from licensed energy traders and aggregators. The City has launched Tender No 156S/2025/26 (you will need to login) to acquire up to 500 MW through Power Purchase Agreements spanning one to 10 years. Eligible technologies include solar, wind, gas such as LPG and hydrogen, and other renewable energy sources. Submissions close on 13 May 2026 at 10:00.
The City spends roughly 70% of its tariff income on bulk electricity from Eskom, making the search for cost-effective alternatives crucial. The tender is designed to secure power at rates below Eskom tariffs, alleviating pressure on residents and businesses while diversifying Cape Town’s energy mix. Successful bidders must deliver first power within 36 months of signing a PPA, with each project required to have a minimum contracted capacity of 5 MW. All renewable energy benefits and green attributes will be transferred to the City.
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Mayoral Committee Member for Energy, Alderman Xanthea Limberg, said the initiative positions Cape Town as a leader in municipal energy procurement. “This is a pioneering step to procure clean and affordable energy from the open market and reduce our reliance on Eskom’s costly power. The 500 MW tender forms part of our landmark Energy Strategy and Mayoral Priority Programme, underlining our commitment to sustainable and affordable electricity for residents and businesses.”
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Only NERSA-licensed electricity traders or those in the process of registration may participate. One or multiple bidders will be selected for a panel, after which a secondary process will rank financial offers. Bidders are required to offer prices lower than the equivalent Eskom Time-of-Use tariff. Energy procured cannot come from plants already contracted to the City or included in existing tender processes, and the City will not participate in plant development.
The initiative also enables Cape Town to engage with the South African Wholesale Electricity Market, further expanding opportunities for cost-effective, carbon-neutral power.
Author: Bryan Groenendaal
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