South Africa: How Long Does it Take to Write The New 100MW Generation Threshold Notice?

  • More than a month ago, on 10 June, President Ramaphosa lifted the limit for generation for companies without the need for a licence from 1MW to 100MW.

After grim years of loadshedding, it seemed that South Africa’s future was brighter with cutting of red tape for embedded generation projects of up to 100 MW. This frees up industry and business to build and use their own substantial embedded generation capacity, giving them a more reliable electricity supply and easing pressure on the national grid.

But weeks later, we’re still waiting for Minister of Mineral Resources and Energy, Gwede Mantashe, to formally gazette this the updated limit in an amendment to Schedule 2 of the Electricity Regulation Act.

“Why is gazetting this amendment taking so long? Is this an indication that the Minister does not really support the President’s announcement?” asks Liz McDaid, OUTA’s Parliamentary and Energy Advisor.

“Raising the threshold to 100MW was an urgent decision which took too long to be made, due primarily we believe to Minister Mantashe’s apparent opposition to it. Now the Minister is dragging his feet over gazetting the raised threshold.”

When the President made the announcement in June, he made it clear that the relevant legal processes would be followed, which OUTA welcomes, and gave the Minister 60 days to gazette the amendment to the schedule.

OUTA believes this matter is urgent and not complicated. Those 60 days are not required waiting time but a maximum.

The President’s announcement made it clear that the relevant legal processes must be followed, which OUTA welcomes. However, the President said that the update to the Electricity Regulation Act schedule may take up to 60 days to gazette, which OUTA believes is far too slow. “What do they need to do? It’s a proclamation in a gazette of a few lines,” says McDaid.

“Leadership by the Minister and his department in the energy sector has been spectacularly lacking,” says McDaid.

“We saw this in the delays in renewable energy bid windows, the determined efforts to set up a new nuclear generation deal and the disastrous Karpowership deal, now thankfully blocked by the Department of Forestry, Fisheries and Environmental Affairs. It’s a pattern of non-action on the future and a commitment to the past.”

The Minister was also so slow about deciding on his own 10MW threshold that it was never finalised. In February, the President promised in his State of the Nation Address 2021 that the schedule would be amended “within the next three months” to increase the embedded generation licensing threshold, without specifying a threshold. The only got as far as gazetting the intention to amend the schedule for comment in April and promising finalisation during his budget speech in May.

Author: OUTA

OUTA is a civil activist organisation in South Africa that empowers civil society to ensure responsible use of tax revenues throughout all levels of Government. 

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