The Electricity and Energy Department has officially rolled out a new Energy Savings Performance Contracting (ESPC) model designed to help municipalities cut costs and improve power use, with a larger funding pool and expanded reach.
The initiative focuses on practical interventions including solar PV rooftops, renewable energy, and system optimisation in waterworks, according to Deputy Minister of Electricity and Energy Samantha Graham-Maré.
“We talk a lot about Eskom debt in municipalities and how much they owe, and we do know that a lot of electricity that is being used doesn’t need to be used,” Graham-Maré said. “So we talk about energy efficiency as the first fuel. In other words, this is energy that you don’t have to actually generate because you save it.”
The ESPC model allows municipalities to leverage private funding for retrofitting facilities, street lights, and wastewater treatment works. The department has previously provided grants for such work, but Graham-Maré acknowledged that government cannot supply all the necessary money.
“Municipalities don’t have the money to retrofit and do the work that needs to be done,” she said. “We’ve brought in this new contracting model that allows municipalities to leverage private funding.”
Addressing transmission constraints, the Deputy Minister noted that South Africa needs to build approximately 14,000 kilometres of transmission lines to meet energy objectives — a R450 billion expenditure the government currently lacks. The new model also aims to decentralise procurement, allowing municipalities to buy small-scale embedded generation, including rooftop solar from residents.
When asked about ring-fencing saved funds for basic services, Graham-Maré confirmed her department is prepared to take on additional monitoring responsibilities. “If our department is required to do additional work and that requires us monitoring the funding and the ring fencing, then we must do that.”
The Deputy Minister also addressed load reduction, stating the objective is to eliminate it completely by March 2027. Load reduction has already been cleared entirely in the Northern Cape and Western Cape, with three additional provinces — including North West — expected to be cleared by June.
Regarding Eskom’s achievement of one full year without load shedding as of May 18, Graham-Maré credited a confluence of factors, including reduced corruption, improved maintenance, and procurement efficiencies. While rooftop solar has played a role, she noted that recent storms meant minimal solar generation, meaning Eskom carried the system.
“A huge shout out to Eskom for the incredible job that they have done,” she said. “In the main, the work done by Eskom really needs to be recognised because that has been the largest part of ensuring that we don’t have any load shedding.”
The department is working with partners including the DBSA, IDC, NBI, and GIZ to implement the model. Graham-Maré described Eskom debt as “a symptom” of systemic problems in the municipal space, adding that reducing pressure on municipalities will give them freedom to focus on other service delivery areas.
