'Energy reform plans will ease burden on Eskom, but devil will be in the detail'
- There's been a positive response after President Cyril Ramaphosa announced changes to the power regulations
- Independent power producers (IPPs) will soon be able to produce up to 100MW of power without having to go through a long drawn-out licencing process
- The new regulations will be gazetted within 60 days but there are concerns about the potential T&Cs
- Prof Mark Swilling from Stellenbosch University says it's unclear if the concession will come with restrictions on selling surplus power
The amended regulations will exempt generation projects up to 100 MW in size from the NERSA licensing requirement, whether or not they are connected to the grid. This will remove a significant obstacle to investment in embedded generation projects.https://t.co/XySPSw75Yi— Cyril Ramaphosa 🇿🇦 #StaySafe (@CyrilRamaphosa) June 10, 2021
Newly announced amendments to the Electricity Regulation Act could ease South Africa's reliance on Eskom and the long-term impact of load shedding on the economy.
On Thursday, President Cyril Ramaphosa announced that independent power producers (IPPs) will soon be able to produce up to 100MW of power without having to apply for licences from the National Energy Regulator of South Africa (Nersa).
The exemption threshold for IPPs to generate power will rise from 1MW to 100MW to lift the economy which has taken a knock due to the country's worsening electricity crisis.
Professor Mark Swilling, the co-director of the Centre for Sustainability Transitions (CST) at Stellenbosch University, says the changes will undoubtedly ease the pressure off of Eskom.
However, he says the announcement will not provide immediate relief to South Africans from load shedding.
We've still got at least another year I would say where we will be struggling with load shedding.Prof Mark Swilling, Co-Director - Centre for Sustainability Transitions at Stellenbosch University
But this reduces the pressure on Eskom to resolve all the problems.Prof Mark Swilling, Co-Director - Centre for Sustainability Transitions at Stellenbosch University
Ramaphosa has promised the amendment will be published within 60 days.
However, with the high occurrence of load shedding during the current winter period some have argued that the changes should be gazetted urgently.
Prof Swilling says the fine print of the new regulations will be crucial as the details remain scarce for those IPPs interested in selling power back into the grid.
The professor says 100 megawatt is more than anyone would need and says it would only make sense of "if you're allowed to sell your surplus electricity".
There have already been questions about why it's taking so long because basically the document is done, it's a slight amendment to an existing document. Why it's taking 60 days is a major puzzle, especially in light of the very extreme emergency we currently face.Prof Mark Swilling, Co-Director - Centre for Sustainability Transitions at Stellenbosch University
I do foresee some pushback after the 60 days when, in the detailed fine print, there are some complexities and obstacles to implementing the solution.Prof Mark Swilling, Co-Director - Centre for Sustainability Transitions at Stellenbosch University
The bottom line is if you build a 100-megawatt plant in your factory, you're going to have a surplus and you'll want to be able to sell that surplus to somebody else and that might be restricted in the small print. That's where I think we'll find some pushback if there are set restrictions in that regard.Prof Mark Swilling, Co-Director - Centre for Sustainability Transitions at Stellenbosch University
Meanwhile, the South African Local Government Association (Salga) says the announcement is going to be a game-changer for municipalities.
Salga's head of energy and electricity distribution, Nhlanhla Ngidi, says municipalities will have to rethink their business models in order to secure more investment for additional electricity generation.
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