Staff Reporter.
The National Energy Regulator of South Africa (NERSA) has welcomed the decision to amend Schedule 2 of the Electricity Regulation Act, 2006 (Act No. 4 of 2006), to exempt generation facilities up to 100MW from the licensing requirement.
President Cyril Ramaphosa announced on Thursday that the regulation will be amended in an effort to resolve the country’s energy supply shortfall and reduce the risk of load shedding.
“The exemption is aimed at achieving energy security, and reducing the impact of load shedding on businesses and households across the country.
“The exemption includes generation projects connected to the grid, as well as those not connected to the grid. However, the generation facilities will still be required to apply to NERSA for registration to ensure that they meet all the requirements,” NERSA said on Friday.
NERSA said it will await the gazetted Schedule 2 of the Electricity Regulation Act, 2006, from the Department of Mineral Resources and Energy for implementation.
“Any material changes necessitated by the amended Schedule 2 will be communicated in due course,” NERSA said.
The Department of Mineral Resources and Energy is expected to publish the final version of the amendment to Schedule 2 within the next 60 days or sooner.
Meanwhile responding to the announcement, renewable energy industry body, the South African Wind Energy Association (SAWEA), welcomed the move to lift the threshold for companies to produce their own electricity without a licence. It views this as another indication the country is well on its way to a decentralised, and decarbonised, renewable energy generation power system.
SAWEA says it is the industry’s understanding that the Department of Mineral Resources and Energy is looking to encourage substantial investment in the energy generation sector, in order to support economic growth and diversify the generation sources away from just a single risk entity.
“When the amended regulation was issued for public comments, we made strong submissions that the allotted 10MW threshold would be too small a shift to open up this highly-regulated sector to the substantial investment that is required,” said Ntombifuthi Ntuli, CEO of SAWEA.
“We further submitted that the threshold for licence exemptions should be increased to between 50MW and 100MW,” she notes, adding this announcement means the industry can now easily enter into power purchase agreements with private entities, especially intensive energy users, and deliver projects quickly.
According to SAWEA, it has been reported that large companies, mines and farms are believed to have 5 000MW in pent-up projects, which could be released if licensing requirements were lifted.