Project finance and energy specialists from a leading domestic law firm have questioned whether the timetable outlined by the National Energy Regulator of South Africa (Nersa) for providing its concurrence with two Ministerial determinations for new power generation “truly reflects the urgency of the need for solutions to South Africa's electricity generation shortfall”.
In a note to clients, a team of Webber Wentzel attorneys, led by partners Jason van der Poel and Alexandra Felekis, express the view that the law provides dispensation for Nersa “to attenuate the public consultation process” on the basis of the country’s prevailing electricity supply emergency.
The note was released after Nersa published two consultation papers on March 18, which effectively initiated the long-awaited process for providing concurrence with Ministerial determinations submitted to the regulator by Mineral Resources and Energy Minister Gwede Mantashe in line with Section 34 of the Electricity Regulation Act.
Both determinations were signed by Mantashe on February 18.
In an earlier opinion piece, released ahead of the publication of the consultation papers, Webber Wentzel lawyers suggested that an expedited public-participation process, or even dispensing with the process entirely, “may be permissible and necessary to enable a swift response by government to close the existing electricity supply deficit”.
“This is particularly the case given that a lengthy public consultation would defeat the very purpose of the two determinations – which is to secure energy on an urgent basis,” Megan Adderley and Melissa Hendrickse opined, while stressing that the circumstances would have to be exceptional to dispense with public participation entirely.
In the event, Nersa decided to proceed with two distinct consultation processes: a slightly accelerated one for consultation paper 1, dealing with the near-term procurement of new generation capacity, up to 2 000 MW, from a range of energy technologies; and a more extensive one for consultation paper 2, dealing with the procurement of 11 813 MW from specific technologies, including solar photovoltaic, wind, gas, battery storage and coal.
There would be no hearings in relation to the first consultation paper, but Nersa intended announcing the date for hearings on the second consultation paper once it had received and collated written comments.
Nersa set a deadline of April 14 for written submissions on consultation paper 1 and May 7 for consultation paper 2.
“Examining the timetable provided, in relation to the consultation paper 1, Nersa will indicate whether or not it concurs in approximately 40 working days from 18 March 2020, that is on or about 19 May 2020; and in relation to consultation paper 2, Nersa will indicate whether or not it concurs in approximately 90 working days from 18 March 2020, that is on or about 29 July 2020,” Webber Wentzel stated in its note.
Should Nersa decline to provide its concurrence, procurement would be delayed even further, as that would imply the process starting afresh with the drafting of new determinations by the Minister. The resulting delay would “leave South Africa and its people in a weak and undesirable position”.
“We trust that the preparation of the requests for qualifications and or proposals under the resulting independent power producer procurement programmes will be prepared concurrently to avoid time slippage once Nersa has concurred with the Minister,” the lawyers conclude.