- The National Energy Regulator of South Africa (NERSA) has approved the Reasons for Decision (RfD) on the assignment of Eskom’s rights and obligations under the Power Purchase Agreements (PPAs) concluded with Independent Power Producers (IPPs) in terms of section 34 of the Electricity Regulation Act, 2006 (Act No. 4 of 2006), to the National Transmission Company of South Africa (NTCSA).
- The NTCSA become fully operational as a stand alone entity on 1st July after being unbundled from Eskom. Read more
The Energy Regulator approved that the powers and duties of Eskom Holdings SOC Ltd under the section 34 PPAs, be assigned to the NTCSA on 11 March 2024. Eskom applied to NERSA for consent to cede/assign its powers and duties on 21 December 2023.
New generation licences
The Energy Regulator has also approved the issuance of generation licences for the operation of generation facilities utilising Battery Energy Storage System (BESS) technology to Oasis Aggeneis (RF) (Pty) Ltd, Oasis Mookodi (RF) (Pty) Ltd, Oasis Nieuwehoop (RF) (Pty) Ltd and Mogobe BESS (RF) (Pty) Ltd.
The generation licence applications follow an announcement by the Minister of Mineral Resources and Energy (‘the Minister’) on 30 November 2023 that the four were preferred bidders for operating generation facilities utilising BESS technology. The four bidders, totalling 360MW, were successful out of 17 bids received in the determination issued by the Minister for the procurement of 513 MW generated from storage.
The Energy Regulator also approved the Capital Cost Recovery Charge Rate (CCRn) that is used to calculate the tariff in the PPA between each preferred bidder and the NTCSA. The details of the preferred bidders and the Charge Rates are reflected in Table 1 below.
The Electricity Price Determination Methodology Rules update
The Energy Regulator rescinded the decision of 14 December 2023 on the Electricity Price Determination Methodology Rules (EPDMR) and resolved that a plan will be developed to clarify the approach in processing and evaluating future revenue and tariff applications.
The decision follows the consideration of the practicability of implementing the rules at this stage, and the fact that licensees and stakeholders are not yet ready for the implementation. The Energy Regulator also indicated the need to align the rules with the empowering provisions of the Electricity Regulation Act, 2006 (Act No. 4 of 2006) and the Electricity Pricing Policy.
The EPDMR has not been implemented; in this regard, the Energy Regulator may take another decision regarding the EPDMR, accepting that administrative action is taken only when the EPDMR has been applied. NERSA remains committed to reviewing its regulatory tools, considering the dynamic changes in the electricity supply industry, as well as legislative change, the unbundling of Eskom and new investments in energy generation.
The detailed Decisions and Reasons for the Decision documents regarding the above decisions will be available on the NERSA website at www.nersa.org.za in due course.
Author: Bryan Groenendaal
