Swellendam Municipality's Renewable Energy Initiatives and Strategic Vision
Swellendam Municipality, located in the Overberg district of South Africa, is strategically positioned to drive renewable energy initiatives for economic stability and growth. With a focus on green economy development, the municipality aims to reduce dependence on ESKOM, support local investment, and ensure economic sustainability. Aiming to enhance renewable energy infrastructure, Swellendam's vision includes promoting job creation and fostering a resilient, environmentally friendly community.
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Swellendam Municipality Renewable Energy RENEWABLE ENERGY INITIATIVES IN SWELLENDAM Municipal Manager: A Vorster 30 August 2023 A Vorster 30 August 2023
Geographical information Swellendam is situated in the Overberg, approximately 220 km from Cape Town and George on the N2. The municipal area is the largest in the Overberg district regarding geographical spread, covering 3 835km . Swellendam is denoted a "Regional Development Anchor" in the National Spatial Development Framework (NSDF). It is also characterised as a RegionalCentre in the Provincial and District SDFs Swellendam also forms part of a "Key Development Corridor", as identified in the National SDF. Regarding the Provincial SDF, Swellendam has been identified as the eastern anchor of a "Rural Development Corridor".
N1 R60 Swellendam N2 N2
Strategic position Development Corridor Swellendam is strategically positioned on all major road networks and transport corridors to unlock future opportunities for Swellendam Municipality, the Overberg and the Western Cape province. Swellendam is situated on the N2 and R60 and links Cape Town, the Garden Route and the Eastern Cape on the N2 and the N1 national road with the N2 national road via R60 Given its importance in the regional settlement hierarchy, and location relative to key transport, travel, and development corridors, it is imperative that Swellendam maintains economic stability and is enabled to maintain its growth and development trajectory
New Strategic Vision To enable renewable energy and a green economy To gain more independence from ESKOM To support local economic investment and growth for jobs G4J To ensure the economic sustainability of the municipality.
Council, administration and governance We have a stable council and a professional, experienced administration. Our good governance practices are evident from our seven clean audits. The Infrastructure Department has technical capacity at the senior level consisting of the Senior Technical Manager who is the RE champion and Electricity Manager
Network, Load and demand GRID INFORMATION Owns the entire distribution network in Swellendam town. Swellendam has an NMD of 10.5MVA from Eskom. The winter peak for Swellendam is 9.5MVA, with outliers reaching 10.5MVA due to cold load starts following extended load-shedding shifts. The current Railton housing project in Swellendam, which consists of 950 RDP units, will require an increase in MVA and NMD with ESKOM to 12MW We are applying for a 18 MVA Renewable Energy containerised project as part of the Premier s Renewable Energy project
Network, Load and demand Swellendam CBD and the Industrial area have a peak demand of around 2.5 and 4 MVA, respectively. Both zones have dedicated feeders and can be energised in isolation directly from the main substation. A locally installed BESS system can supply the Railton CBD in phase 1 to alleviate load- shedding for the businesses, clinic, school, library and community hall. Installed BESS systems on the grid will also help stabilise the grid during peak load periods After installing BESS systems to protect the critical areas from load-shedding as the 1st phase, the 2nd phase will envisage safeguarding the whole of Swellendam against load- shedding by utilising an extensive BESS system coupled with a PV installation.
Land We own parcels of land within our urban edge, of which 59 hectares are favourably situated adjacent to our substation at Betelskop and our main CBD and Industrial area feeders. Other municipal properties comprising another 25 hectares within the urban edge are also located close to network connection points. The land is zoned undetermined. Invasive clearing is already underway. A botanical study was undertaken and indicated which parts of the identified area can be used. In the process to appoint an EAP and commencing with town planning process. The rezoning and prefeasibility assessments will require a basic EIA with input from Heritage WC.
Swellendam CBD Railton CBD Industrial area
PV Area 2 Eskom Substation PV Area 1 Substation PV Area 3 The green areas indicate the available land, with the yellow areas showing the Industrial and CBD areas
Other Renewable Energy projects Landfill site is running out of airspace Engagements with Langeberg, Cape Agulhas and Hessequa Municipality on collaborating to undertake a waste-to-energy project Bid to be set out in September 2023 to test the market The focus will be the management of waste, with a possible by-product of one or other form of renewable energy source SSEG policy drafted; Registration of SSEG systems on line Engaging with DBSA to source funding on feasibility studies in preparation of Renewable Energy projects Normal demand management initiatives 14
Impact of load-shedding on Swellendam Municipalitys financial position
Financial position Electricity revenue is the primary revenue source at 31% for SM, followed by property rates at 15% and 16% for the other services combined. This means that electricity constitutes 50% of all service charges.
Industries and businesses comprise 53% of electricity revenues, and the loss of electricity revenue from these customers will severely impact the municipality. Since Sept 2022, electricity sales have reduced by an average of 14% to 18% p/m and are projected to decline by an additional 4% in FY2024. The decrease in energy sales amounts to a revenue margin loss of R3.5-million for FY2023 and a projected loss of R4,6 million for FY2024 This situation will stabilise when the municipality successfully partners with the WCG Energy Resilience Program
Energy crises The energy crisis has significant effects on the financial sustainability of the municipality, which include: o Reduced consumption of electricity affects the units sold and effectively minimises the revenue margins; o Electricity used as a credit control measure becomes insufficient as residents purchase less electricity less frequently and move to alternative energy solutions; o Reduced sales margins will result in tariff increases above the approved NERSA guidelines; o Unemployment will increase, and more residents won t be able to afford to pay their municipal bills, which will significantly reduce the municipality s cash position;
o The municipality will not be able to meet the minimum liquidity requirements, barely pay its creditors on time and not be able to sustain its capital investment programme, which is already under pressure. o The municipality has a small revenue base of 11 464 households and cannot absorb the projected cash losses; o For the 2023/2024 Annual Budget, the municipality had to increase property tax by 14% to supplement the electricity revenue loss and reduce employee-related cost by 2%, whilst other operational expenditure only allows for the essentials.
Payment rate Due to the electricity crisis, the municipality s collection rate decreased from an average of 98% to 96,8% and is projected to decline further to 96% in FY2024 with an estimated income loss implication per annum of +/- R3,9m
Economic and employment impact by including Swellendam in the WCG Energy Resilience Program
Invest in infrastructure School of Skills Importance of Agri-processing and agriculture Hospitality sector Weighbridge Buffeljags dam Improved service delivery Safeguarding industries and creating opportunities
Invest in infrastructure Eskom requires R16 million from the Municipality to increase its capacity to supply the new 950 RDP units in Railton Swellendam with electricity. This upgrade of the Eskom network that Swellendam Municipality is expected to pay for will become redundant in 2029 when Eskom completes the upgrade of the main Agulhas transmission line. It would be more prudent to spend the R16 million towards improving Swellendam's own electrical infrastructure including BESS systems to manage the NMD
School of Skills SM is working hard to establish a School of Skills in Swellendam. An old school building currently used for offices of Provincial Departments ideally suited for a School of Skills. Discussions with the Department of Agriculture have already taken place to transform this building, which belongs to WC DPW Site is very close to the CBD network connection and can easily be connected to a sustainable electricity supply We must invest in a second School of Skills in the Overberg to support the Agri- processing and manufacturing sector in Swellendam and the whole of the Overberg.
Agricultural production and Agri-processing Overberg is one of the main contributors to Western Cape s international export market Swellendam area produces export fruits such as soft citrus, citrus, and canola All canola in the region is processed at SOILL in Swellendam s industrial area Buffeljagsrivier has 5 packhouses, and all have reached maximum capacity These packhouses also pack and process fruit from Worcester and Ashton area via the R60 New processing and packing plants are needed to process all export fruits under netting from Riviersonderend through Swellendam to the other side of Buffeljagsrivier. Land for this is available in Swellendam s industrial area Swellendam plays a critical role in the Agri-processing and agricultural corridor 25
Hospitality sector Swellendam is home to over 120 guesthouses, boutique hotels and more than 20 restaurants A reliable and constant energy supply will safeguard hospitality businesses and their employees jobs It is also home to the smallest national park in South Africa, Bontebok Park and is also supplied with electricity from the industrial feeder. Bontebok Park is purchasing land next to the N2 to improve their presence on the national road and is considering establishing a tourism centre or fuel station. This will be the ideal setting for a recharging station for EVS.
Weighbridge Swellendam has a provincial weighbridge on the N2 which falls within the industrial area and, therefore, will benefit the Provincial government s operation and income if they can have a sustainable source of electricity. Will improve road safety if the weighbridge is always operational.
Buffeljags Dam project The Department of Agriculture plans to increase the Buffeljags Dam's storage capacity by increasing the dam wall by between one and 1.5 meters. This will unlock almost 900 hectares of additional agricultural land for production. Crops will include soft citrus, citrus, pomegranate, kiwi fruits and canola for the international export market. The growth forecast for Swellendam for Agri-processing is optimistic but will require a stable energy supply for their operations New irrigated agricultural land will unlock between 4 and 6 permanent job opportunitiesp/h and will grow Swellendam and Overberg s employment and export valuta 28
Improved service delivery SM needs help from stages 4 and above to maintain an acceptable and safe service standard for water and sewerage. WTW and WWTW can be connected in the 1st phase to allow full operation to limit the risk of environmental pollution in the Breederiver.
Safeguard industry and create opportunities Swellendam industrial area is home to two of the largest boat builders outside of Cape Town for the local and export markets SSK will need a stable energy source for their envisioned malting plant in the industrial area that can potentially unlock a further 350 job opportunities (G4J) Possibility for an electric charging station for EVs in Swellendam on the N2 corridor Agri-processing opportunities in cold storage via rail Extraordinary expansion potential in the industrial area
Closing Swellendam is committed to good governance and high levels of service delivery. WCG can unlock Overberg s growth by investing in a growth node that will not only protect jobs but unlock new job opportunities. We have the land, the infrastructure, the technical expertise, and the political and administrative will to make this a success.
