The City of Johannesburg is moving to reacquire Kelvin power station, South Africa’s only privately owned coal-fired power plant, as part of the metro’s moves to reduce dependence on Eskom and deliver cheaper electricity its customers. City Power, the municipality’s electricity distributor, has submitted feasibility proposals to the city council seeking approval to pursue detailed financial and technical studies to bring the power station back under municipal control. Johannesburg confronts an energy crisis likely to threaten the city’s competitiveness as an investment destination.
The move comes months after new investors, including businessman Sandile Zungu’s outfit and the Government Employees Pension Fund (GEPF),strengthened their stake in the facility through Harith InfraCo. “The city’s heavy reliance on Eskom has exposed it to persistent generation shortfalls, frequent load-shedding and rising electricity tariffs,” according to a feasibility study presented to the Joburg council and seen by Business Day. “Reacquisition or strategic control of Kelvin will reduce City Power’s procurement costs, as demonstrated by the lower average cost per kWh from Kelvin compared to Eskom.
This not only improves City Power’s financial sustainability but also creates the potential for tariff relief for customers, supporting the city’s goals of affordability and inclusive economic growth,” the document reads. City Power’s data shows Kelvin supplies electricity at R1.61 kWh, compared to Eskom’s R1.89 per kWh, a saving of R0.28 per unit that could translate into significant relief for consumers and businesses. During the year to April 2025, City Power purchased 789.7GWh from Kelvin for R1.27bn, while Eskom supplied 7,376.1 GWh at a cost of R13.97bn.
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Though Kelvin contributes only about 10% of the city’s base load requirements, the study says acquiring the power station could reduce power procurement costs. “Owning these upstream assets directly reduces energy procurement costs,” the feasibility document explains. “Savings and generated revenues can be retained within the municipal energy ecosystem, improving financial sustainability.” Operational since the 1950s, Kelvin’s location in Johannesburg’s metropolitan area provides transmission advantages that reduce power losses and improve grid stability for the city’s industrial and commercial centres. The facility was originally commissioned in 1956 and remained city property until 2001, when it was privatised and then resold many times.
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