Africa|Business|Energy|Generators|Lifting|Power|Projects|Resources|Power Generation|Infrastructure
Africa|Business|Energy|Generators|Lifting|Power|Projects|Resources|Power Generation|Infrastructure

Draft regulations removing licensing cap for distributed generators released for comment

Mineral Resources and Energy Minister Gwede Mantashe

Mineral Resources and Energy Minister Gwede Mantashe

Photo by Creamer Media Chief Photographer Donna Slater

2nd September 2022

By: Terence Creamer

Creamer Media Editor


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Government Gazette Notice  (2.50 MB)

Mineral Resources and Energy Minister Gwede Mantashe has published for public comment proposed changes to South Africa’s electricity regulations, exempting distributed generation facilities of any size from applying to the National Energy Regulator of South Africa (Nersa) for a licence.

The majority of the exempted facilities will still need to be registered with Nersa and will have to comply with either transmission or distribution codes.

Hitherto, facilities below 100 MW have been exempt from licensing in line with a reform announced jointly by President Cyril Ramaphosa and Mantashe in June 2021, lifting the licence-exemption threshold from 1 MW to 100 MW.

However, on July 25 Ramaphosa announced that the 100 MW cap would be lifted as part of a series of initiatives aimed at tackling load-shedding, which has been implemented by Eskom on 91 days this year already.

The proposed changes to the exemption rules are contained in a draft Licensing Exemption and Regulation Notice, under section 36(4) of the Electricity Regulation Act, and published in the Government Gazette of September 2.

“The Licensing Exemption and Regulation Notice seeks to give effect to the various measures to address South Africa’s electricity challenges as announced by President Cyril Ramaphosa in July 2022,” the Department of Mineral Resources and Energy said in a statement.

“It outlines a set of electricity generation activities that are exempt from licensing, and those that in addition to being exempt from licensing must also comply with the Code (distribution code, transmission code, or any code approved by the Regulator) and must be registered with the regulator.”

Interested persons and organisations have been given 30 days to submit written comments on the proposed changes.

Since the initial lifting of the threshold to 100 MW, several companies have announced investments, or investment intentions, in distributed generation facilities, including facilities that will wheel electricity to third parties using either Eskom or municipal grid infrastructure.

Ramaphosa told business leaders this week that the necessary amendments were being made to remove the licensing threshold for embedded generation.

He also announced that over 500 MW of private renewable power generation projects had been registered with Nersa to date, and that the pipeline of such projects, which were at various stages of development, stood at over 6 000 MW.

Edited by Creamer Media Reporter




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