The City of Cape Town is poised to become the first municipality in South Africa to procure electricity at scale from licensed energy traders and aggregators in a move towards energy independence and sustainability.
The innovative Energy Trader Tender, which seeks to secure 500 megawatts (MW) of power through Power Purchase Agreements (PPAs) lasting between one to ten years, accommodates a diverse range of power generation technologies, notably solar energy.
The deadline for submissions to this landmark tender is set for 13 May 2026, with the aim of enhancing the resilience of Cape Town’s energy infrastructure.
The decision comes as the City grapples with the significant financial burden of purchasing electricity from Eskom, which accounts for around 70% of its tariff revenue. Eskom’s escalating electricity costs pose a persistent challenge, prompting the need for innovative solutions to mitigate impacts on consumer tariffs.
‘This is the latest pioneering step we are taking to procure clean and affordable energy from the open market, and to reduce our reliance on Eskom’s very expensive power,’ said Alderman Xanthea Limberg, the Mayoral Committee Member for Energy.
‘The City remains ahead of the curve, adapting to international best practices and South Africa’s transitioning energy landscape through a mix of in-house solutions and greater private sector collaboration,’
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The City’s strategic 500 MW tender forms part of a broader Energy Strategy embedded within the focused Mayoral Priority Programme (MPP).
These initiatives reflect the City’s commitment to significantly reducing energy costs whilst ensuring access to sustainably more affordable electricity for both residents and businesses.
Alderman Limberg expressed a call to action for NERSA-licensed energy traders and aggregators, encouraging them to submit proposals. ‘The tender not only aims to accelerate power procurement in the open market at competitive prices but also positions the City as an energy leader among South Africa’s local governments,’ she stated.
Additionally, Cape Town’s procurement initiative allows it to participate in the South African Wholesale Electricity Market (SAWEM), enabling bidders to procure energy directly, thus further diversifying the City’s energy portfolio.
‘We invite submissions to support our goals of reliable, affordable and carbon-neutral energy,’ Limberg added.
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Picture: @Eskom_SA / X
Source: City of Cape Town
