South Africa: Embedded Generation Threshold Increase to 100MW Gazetted

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  • South Africa Africa’s Mineral Resources and Energy Minister, Mr Qwede Mantashe, has today gazetted the  Amendment of Notice: Licensing Exemption and Registration Notice, in terms of the Electricity Regulation Act (4/2006). 
  • On June 21st, 2021, the South African President, Mr Cyril Ramaphosa announced that the threshold for private companies to produce their own power without a licence, will be increased from 1 MW to 100MW.
  • “This is not the privatisation of Eskom, this could be the rebirth of Eskom,” said Ramaphosa at the time.

Schedule 2 of the Electricity Regulation Act to increase the National Energy Regulator of South Africa (Nersa) licensing threshold for embedded generation projects from 1 MW to 100 MW, has now been gazetted.

The following activities with a capacity of no more than 100MW, are exempt from licensing but still require registration: 

The operation of a generation Facility with or without energy storage, with a capacity of no more than 100 MW with a Point of Connection on the transmission or distribution power system, in circumstances where:

  • The generation Facility is operated to supply electricity to an end-use customer and there is no wheeling of that electricity;
  • The generation Facility is operated to supply electricity to an end-use customer by wheeling; and the generator has entered into a connection agreement with the holder of the transmission or distribution licence in respect of the power system over which the electricity is to be wheeled;
  • The generation Facility does not export nor import any electricity onto or from the transmission or distribution power system.

The following activities are exempt from the requirement to apply for, and hold a licence under the Act and these activities are not required to be registered with the Regulator:

  • The operation of a generation Facility with or without energy storage for the sole purpose of providing standby or back-up electricity in the event of, for a duration no longer than, an electricity supply interruption.
  • The operation of any generation Facility with or without energy storage provided irrespective of capacity (MW), the Facility does not have a Point of Connection.
  • The operation of a Facility with a capacity of no more than 100 kilowatts, which complies with the Code and has a Point of Connection; the Distributor has prescribed the conditions relating to the continued use of the Point of Connection; and the Regulator has prescribed the manner in which the Distributor shall keep a register of each Facility.

The amendments allow generation projects to power mines, factories and farms to wheel electricity through municipal and Eskom networks and sell surplus electricity to non-related buyers.

Link to the full notice HERE

Author: Bryan Groenendaal


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