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Electricity Regulations on New Generation Capacity Under the Spotlight

May 6, 2020

Department of Mineral Resources and Energy

Amendments to Electricity Regulations on New Generation Capacity are in the pipeline.

The mineral resources and energy department published draft regulations amending the electricity regulations on new generation capacity in Government Gazette 43277 for comment.

The proposed regulations were drawn up in terms of the Electricity Regulation Act.

The Electricity Regulations on New Generation Capacity, published in 2011, apply to the procurement of new generation capacity by organs of state including new generation capacity derived from renewable energy sources and co-generation; base load, mid-merit load and peak load new generation capacity and cross border projects, but excluding new generation capacity derived from nuclear power technology.

The draft amendments propose a new definition on ” ‘sound financial standing’ means an organ of state must be a going concern, and that the financial commitments to be incurred acquiring new generation capacity can be met by funds – (a) designated within the organ of state’s existing budget; or (b) destined for the organ of state in accordance with the future budgetary projections for the institution”.

A draft amendment is proposed to Regulation 3 permitting a municipality to apply to the minister to establish new generation capacity.

Conditions for applications by municipalities are set down.

Comment is invited within 30 days of the date of publication.

Meanwhile, the department has announced that petrol (both 93 ULP and LRP) will decrease by 174.00 c/l on 6 May 2020.

In a statement, the department indicated that the main reasons for the fuel price adjustments include the depreciation of the Rand, on average, against the US Dollar (from 16.43 to 18.47 Rand per USD) during the period under review when compared to the previous one; the decrease in the average Brent Crude oil price from 35.25 USD to 20.00 USD per barrel during the period under review and the international prices of all refined petroleum products decreased substantially following that of crude oil resulting in average over recoveries of over 200.00 c/I on petrol and diesel and 252.00 c/l on Illuminating Paraffin.

Other adjustments for May 2020 include:


• Petrol (both 95ULP and LRP): one hundred and seventy-four cents per litre (174.00 c/l) decrease;
• Diesel (0.05% sulphur): one hundred and sixty-one cents per litre (161.00 c/l) decrease;
• Diesel (0.005% sulphur): one hundred and fifty-six cents per litre (156.00 c/l) decrease;
• Illuminating Paraffin (wholesale): two hundred and twenty-three cents per litre (223.00 c/l) decrease;
• SMNRP for IP: two hundred and ninety-seven cents per litre (297.00 c/l) decrease; and
• Maximum LPGas Retail Price: two hundred and sixty-two cents per kilogram (262.00 c/kg) decrease.