Municipalities diversify electricity sources

South African municipalities are increasingly turning to independent power producers (IPP) to diversify their electricity supply and reduce reliance on Eskom, the national power utility. This shift aims to secure a more stable and varied energy supply, especially as Eskom has faced ongoing challenges with reliability and capacity.

Ekurhuleni secures approval for new energy projects

On Monday, October 19, the Ekurhuleni municipality in Gauteng received ministerial authorization to purchase up to 2,400 MW of electricity from independent producers. This includes 1,237 MW from solar power, 780 MW from gas, 183 MW from waste-to-energy, and 200 MW from innovative technologies.

Municipality prepares for energy purchases

In May, Ekurhuleni had already selected 75 independent power producers and established an escrow account to ensure secure payments and help finance the projects. At that time, the municipality stated it would purchase nearly 20 billion rand (approximately 1.22 billion USD) of electricity annually, exclusively from Eskom.

Other municipalities follow similar strategies

Ekurhuleni is not alone in this approach. The eThekwini municipality, which includes Durban, was authorized in August 2025 to purchase 400 MW of electricity from independent producers. Cape Town also took a step forward in August 2026 by signing two contracts for 70 MW of solar power at prices lower than those offered by Eskom.

Industrial companies adopt renewable energy

Large industrial companies have also embraced renewable energy. In July, Kumba Iron Ore, a subsidiary of Anglo American, signed a 63 MW solar power agreement for its Sishen mine. Earlier, in February, Sibanye-Stillwater contracted approximately 220 MW of renewable electricity from Etana Energy.

Challenges remain for energy diversification

While these initiatives aim to enhance energy security and promote the transition to renewable energy, their success depends on the actual construction of projects and the ability of South Africa’s electrical grid to accommodate the new capacity.