Saturday, 17 October 2020 11:06

Photo Credit:Waldo Swiegers.

Mineral Resources and Energy Minister Gwede Mantashe has gazetted amendments to Electricity Regulations on New Generation Capacity to enable municipal power generation.

Published on Friday, the regulations give effect to President Cyril Ramaphosa’s commitment during the State of the Nation Address that government will enable municipalities in good financial standing to develop their own power generation projects.

In a speech to Parliament, Ramaphosa said steps would be taken to enable power generation for own-use, but he did not specifically comment on whether municipalities would be freed up to build capacity, or procure electricity from independent power producers (IPPs).

Mantashe said the amendments to the regulations clarify the regime applicable to municipalities when requesting Determinations under Section 34 of the Electricity Amendment Act.

"This will ensure an orderly development that is in line with the applicable Integrated Resource Plan (IRP) and municipal Integrated Development Plans (IDPs). Furthermore, the amendments will ensure that Section 34 Determination requests are from municipalities that are in good financial standing with feasible project proposals," the Minister said.

The amendments extend the procurement of new renewables, cogeneration, baseload, mid-merit, peak load, energy storage and cross-border generation capacity to organs of State "active in the energy sector", which includes municipalities.

A municipality must, however, apply to the Minister to procure or buy new generation capacity in accordance with the Integrated Resource Plan (IRP), as well as the municipality’s own Integrated Development Plan (IDP).

A feasibility study must also be submitted in instances where a project is being funded internally, while a municipality must submit proof that it has complied with the provisions of Section 120 of the Municipal Finance Management Act and the Municipal Public-Private Partnership Regulations in those instances where the electricity is being procured from an IPP.

This will ensure an orderly development that is in line with the applicable IRP and municipal IDPs. Furthermore, the amendments will ensure that Section 34 determination requests are from municipalities that are in good financial standing with feasible project proposals,"the DMRE said.