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DOE Shines Light on Electricity Supply Sector

May 15, 2019

Department of Energy

15 May 2019

The orderly evolution of the electricity supply sector remains a key consideration in South Africa’s policy making.

The energy minister, Jeff Radebe, confirmed this during an address at the Africa Utility Week and Powergen Africa meeting in Cape Town.

The minister added that small scale embedded generation via biomass, biogas and municipal waste has the potential to improve municipal revenues and increasing investment in those areas was expected.

Mention was made of the proposed amendments to Schedule 2 of the Electricity Regulation Act recently published by the National Energy Regulator for comment.

The draft notice introduces upper and lower thresholds for generation facilities that should register or be exempted from registering with NERSA, determines that stand-by generators and co-generation facilities should not register with NERSA and that electricity resellers are required to enter into a service level agreement with a licensed distributor to be able to supply electricity to any customer within a supply area of the distributor.

According to the minister, the Schedule 2 amendments will “address the constraints related to licensing potentially hundreds of thousands of rooftop PV systems, biogas and other small scale embedded generators smaller than 1 mega-Watt, and unlock investment in that space”.

The minister also reiterated that the Draft Integrated Resource Plan, currently with NEDLAC, will be concluded soon.

“Cabinet approval of the IRP for South Africa will define a tangible plan for energy security that also enables the participation of Independent Power Producers (IPP) side by side with Eskom and municipalities.”

The minister pointed out that regional interconnection and integration within the Southern African Development Community has been identified as an appropriate strategy for increasing energy trade within the region.

He added that energy security will be strengthened by means of regional development and integration.

In terms of reducing carbon emissions, the minister emphasized that the transition to a low carbon economy “must be in a manner that is not insensitive to the potential impacts on jobs and local economies”.

Carbon capture and storage, underground coal gasification, coal to liquids and other clean coal technologies will allow South Africa to continue using coal resources in an environmentally responsible way.

Meanwhile, speaking at a Nordic Countries Breakfast Meeting in Cape Town, the minister declared that the energy sector is the engine to economic growth in South Africa and requires investment.

“The country needs both the finance, technology and skills to increase the electricity generation capacity. The investments in the sector should ensure that job creation, industrialisation and development of energy equipment manufacturing is relocated to our countries so that the down-stream benefits are also enjoyed in the country.”